SS Innovations International, Inc 10-K for FY2024
SS Innovations International, Inc. (SSII)
About this 10-K
SS Innovations International, Inc filed this 10-K on April 15, 2025, covering the fiscal year ended December 31, 2024 (FY2024).
Headline figures
Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $20.65M
- up 251.5% from $5.88M a year earlier
- Net loss
- $19.15M
- compared with a net loss of $20.88M a year earlier
- Diluted EPS
- -$0.11
- compared with -$0.14 a year earlier
UNITED STATES
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Washington, D.C. 20549
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ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15 (d) OF THE
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DOCUMENTS INCORPORATED BY
REFERENCE:
TABLE OF CONTENTS
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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.
FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual Report”) contains certain statements that constitute forward-looking statements. Any and all statements contained in this Annual Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Those statements appear in this Annual Report, and include statements regarding the intent, belief or current expectations of our Company and management that are subject to known and unknown risks, uncertainties and assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Forward-looking statements in this Annual Report may include, without limitation, statements regarding:
| (i) | the plans and objectives of management for future operations, including plans or objectives relating to the marketing of our surgical robotic systems both in and out of India; |
| (ii) | the timing or likelihood of regulatory filing, approvals and required licenses for marketing our surgical robotic systems in the U.S., the European Union (the “EU”) and in other countries outside of India and potential delays in obtaining U.S. Food and Drug Administration (“FDA”) approval due to recent reductions in government agency staffing; |
| (iii) | our ability to adequately protect our intellectual property rights and enforce such rights to avoid violation of the intellectual property rights of others; |
| (iv) | the timing, costs and other aspects of our surgical robotic systems; |
| (v) | our estimates regarding the market opportunity, clinical utility, potential advantages and market acceptance of our surgical robotic systems; |
| (vi) | the impact of government laws and regulations; |
| (vii) | our ability to recruit and retain qualified research and development personnel; |
| (viii) | difficulties in maintaining commercial scale manufacturing capacity and capability and our ability to generate growth; |
| (ix) | uncertainty in industry demand; |
| (x) | general economic conditions and market conditions in our industry; |
| (xi) | a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items; and |
| (xii) | our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). |
These statements are not guarantees of future performance and are subject to numerous risks, uncertainties, and assumptions that are difficult to predict.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we do not assume any obligation to update any forward-looking statement. We disclaim any intention or obligation to update or revise any forward-looking statement contained herein, whether as a result of new information, future events or otherwise.
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TRADEMARKS, TRADE NAMES, SERVICE MARKS AND LOGOS
“SSi,” “SSi Mantra,” SSi logos and other trade names, trademarks or service marks of the Company appearing in this Annual Report are the property of SSi. Other trade names, trademarks or service marks appearing in this Annual Report are the property of their respective holders. Solely for convenience, trade names, trademarks and service marks referred to in this Annual Report appear without the ® , ™ and SM symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner will not assert its rights, to these trade names, trademarks and service marks.
MARKET, INDUSTRY AND OTHER DATA
Unless otherwise indicated, information contained in this Annual Report concerning our industry and the market in which we operate, including our general expectations and market position, market opportunity, and market size, is based on information from various third-party industry and research sources, on assumptions that we have made based on that data and other similar sources, and on our knowledge of the markets for our services. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates.
In addition, industry publications, studies, and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Item 1. Business” and elsewhere in this Annual Report. These and other factors could cause our actual results to differ materially from those expressed in the estimates made by the independent parties and by us.
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PART I
Item 1. Business.
Company Background
Overview
We are a commercial-stage surgical robotics company focused on transforming patient lives by democratizing access to advanced surgical robotics technologies.
We design, manufacture and market an advanced, next-generation and affordable surgical robotic system called the SSi Mantra.
While surgical robotic systems have gained acceptance globally in the past two decades for providing greater efficiency, better clinical outcomes and reducing healthcare costs, access to such systems remains largely limited to developed countries such as the United States, the European Union (the “EU’) and Japan.
With the SSi Mantra, we are breaking down barriers and accelerating access to surgical robotics technologies in underserved regions of the world.
Developed by a visionary team of surgeons, engineers and industry veterans, the SSi Mantra includes several innovative features to address shortcomings of the current generation of robotic surgery systems.
We commenced development of the SSi Mantra in 2014, received regulatory approval by the Central Drugs Standard Control Organization (“CDSCO”) India’s equivalent of the U.S. Food and Drug Administration (“FDA”), for its sale and use in India and commercially launched sales in August 2022. We also received ISO 13485 (quality management system) approval for the SSi Mantra 3. The SSi Mantra has been clinically validated for safety, efficacy and effectiveness for its intended use to perform robotically assisted surgeries in more than 80 different types of surgical procedures in India without any device related adverse events. As of December 31, 2024, we have installed 62 systems, of which 58 are located in India and 4 at overseas locations. We are currently focusing our efforts on marketing our next generation SSi Mantra 3, which was introduced in June 2024.
Our commercially installed SSi Mantra Surgical Robotic systems in India have been used to perform more than 3,500 surgical procedures, including cardiovascular, thoracic, head and neck, gynecological, urological, cancer and general surgeries. The SSi Mantra 3 has also been granted regulatory approval in Guatemala, Nepal, Ecuador and Indonesia, although our marketing efforts in those countries have been limited to date. We have filed a pre-submission application with the U.S. FDA, requesting feedback on the SSi Mantra. We had a feedback meeting with the FDA on April 2, 2024 and the FDA has indicated that we should pursue the Investigational Device Exemption (“IDE”) route to obtain U.S. approval to market. Currently, we are in the process of preparation of the IDE Application and expect to start our U.S. IDE study in third quarter of 2025, subject to FDA IDE and Institutional Review Board (“IRB”) approvals. We have also been in discussions with an EU Notified Body for the CE certification, which will allow us to market the SSi Mantra in the EU. There can be no assurance as to when we will secure such regulatory approvals, if at all. Our ISO 13485 (quality management system) approval, CDSCO approval for the manufacture, sale and distribution of our products and our Indian export license allow us to market our products in fifty non-FDA and non-EU countries without further regulatory approvals. An additional 79 countries require only minimal registration.
In our journey to make the benefits of robotically assisted surgeries available to as many people of the world as possible, we reached several milestones in 2024:
| ● | In April 2024, our SSi Mantra surgical robotic system was utilized to perform the first pyeloplasty procedure on an infant. |
| ● | In May 2024, we surpassed more than 1,000 procedures globally and 100 robotic cardiac surgeries done using our SSi Mantra systems. |
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| ● | In June 2024 we received regulatory approval for the SSi Mantra from the Indonesian Ministry of Health for clinical use in the Republic of Indonesia. |
| ● | We introduced the new generation SSi Mantra 3 Surgical Robotic System at the Society of Robotic Surgery (SRS) Annual Meeting, which took place from June 20-23, 2024 in Orlando, Florida. |
| ● | On June 15, 2024, we completed the first telesurgery for a urology oncology procedure in India. The surgery involved a complex cysto-prostatectomy case with bilateral lymph node dissection, performed at the Rajiv Gandhi Cancer Institute in Delhi located at a distance of about 35 kilometers from the telesurgery lab in our manufacturing facility in Gurugram, Delhi NCR, India. |
| ● | On June 18, 2024, we announced that our SSi Mantra had been installed at Baidya & Banskota Hospital in Kathmandu, Nepal marking the first time a surgical robotic system had been installed in Nepal. |
| ● | From July 23 - 25, 2024, we unveiled our latest generation, SSi Mantra 3 system in the U.S. during an exclusive demonstration for media, analysts and the investment community at our newly opened showroom located in the New York City financial district. |
| ● | On August 27, 2024, we had an interactive pre-submission meeting with the U.S. FDA. The pre-submission meeting was organized with the FDA’s Center for Devices and Radiological Health (“CDRH”) to seek interactive feedback from them regarding our regulatory strategy, biocompatibility assessment, reprocessing validation, and clinical data. Based on the feedback received from the FDA, we are proceeding with a de novo pathway through an IDE application for pre-market submission of our SSi Mantra Surgical Robotic System. |
| ● | September 2, 2024, marked our entry into Central and South American markets with the installation of our first SSi Mantra system at Interhospital, a large multi-specialty hospital in Guayaquil City, Ecuador following receipt of Ecuadorian regulatory approvals for clinical use of SSi Mantra in May 2024 through our distribution partner, Ingemedica Del Ecuador S.A. |
| ● | In November 2024 we successfully performed the first-ever robotic cardiac surgery in Indonesia, a bilateral IMA CABG (Coronary Artery Bypass Graft), and ASD Repair and Beating Heart Totally Endoscopic Coronary Artery Bypass (TECAB). With more than 278 million people, and almost 3,000 hospitals, Indonesia is the world’s fourth-most-populous country and has significant potential for further expansion of its surgical robotic program. |
| ● | As of December 31, 2024, a total of 2,759 robotic surgeries had been successfully completed using our SSi Mantra system globally and the following table demonstrates the capability of our SSi Mantra to perform a wide variety of surgical procedures of varying complexities: |
| Type of Surgical Procedure | No. of Procedures performed as of December 31, 2024 | % of total procedures | ||||||
| General Surgery | 1,077 | 39 | % | |||||
| Urology | 843 | 31 | % | |||||
| Gynaecology | 391 | 14 | % | |||||
| Cardiac | 151 | 5 | % | |||||
| Colorectal | 156 | 6 | % | |||||
| Gastroenterology | 73 | 3 | % | |||||
| Thoracic | 45 | 2 | % | |||||
| Head and Neck | 19 | 1 | % | |||||
| Plastic/Reconstructive | 04 | - | ||||||
| Total | 2,759 | 100 | % | |||||
We generate revenues from the sale of the SSi Mantra Surgical Robotic System. We offer our SSi Mantra through three selling models: (i) outright purchase, where revenue is realized upfront; (ii) purchase on a deferred or installment payment basis; and (iii) purchase on a pay-per-procedure basis, where revenue is recognized over time. We also earn recurring revenue from the sales of instruments, accessories and services. We sell our products directly to customers as well as through distributors.
The SSi Mantra improves patient experience, reduces variabilities and disruption and lowers per-procedure costs. We believe that the SSi Mantra benefits patients, physicians and hospitals by providing access to an advanced and optimized robotic system.
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Corporate Information
The Company was incorporated in the state of Florida on February 4, 2015, under the name “Avra Surgical Microsystems, Inc.,” and changed its name to “Avra Medical Robotics, Inc.” on November 5, 2015.
From inception through April 13, 2023, we were engaged in developing a fully autonomous medical robotic system using proprietary software which integrated Artificial Intelligence and Deep Learning, or Machine Learning. Our research and development efforts were based in Orlando, Florida, where we established a research partnership with the University of Central Florida.
On April 14, 2023, we consummated the acquisition of CardioVentures, Inc., a Delaware corporation (“CardioVentures”), pursuant to a Merger Agreement dated November 7, 2022 (the “Merger Agreement”), by and among the Company, a wholly owned subsidiary of the Company (“Merger Sub”), CardioVentures and Dr. Sudhir Srivastava, who, through his Bahamian holding company, Sushruta Pvt. Ltd. (“Sushruta”), owned a controlling interest in CardioVentures.
CardioVentures, through a subsidiary, owned a controlling interest in Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company (“SSI-India”), which developed and manufactures and markets the SSi Mantra, which is designed to provide an advanced, yet cost-effective surgical robotic system which make the benefits of robotic surgery available to a larger part of the global population.
Pursuant to the Merger Agreement, at Closing, Merger-Sub merged with and into CardioVentures (the “CardioVentures Merger”). In the CardioVentures Merger, holders of the outstanding shares of common stock of CardioVentures (including certain parties who provided interim convertible financing during the pendency of the Merger Agreement, were issued 135,808,884 shares of SSi common stock, representing approximately 95% of issued and outstanding shares of SSi common stock post-merger, with the existing shareholders of SSi holding approximately 6,544,344 shares of SSi common stock representing approximately 5% of issued and outstanding shares of SSi common stock post-merger.
In addition, the holder of CardioVentures common stock also received shares of newly designated Series A Non-Convertible Preferred Stock (the “Series A Preferred Shares”), which affords the holder 51% of the total voting power of the Company. As a result of the foregoing, a “Change in Control” of the Company occurred, with Dr. Sudhir Srivastava becoming the Company’s principal and controlling stockholder. The Series A Preferred Shares are automatically redeemed by the Company for nominal consideration at such time as the holder owns less than 50% of the shares issued to it in connection with the CardioVentures Merger.
Contemporaneously with the closing of the CardioVentures Merger on April 14, 2023, the Company changed its name to “SS Innovations International, Inc.,” effected a one-for-10 reverse stock split and increased its authorized common stock to 250,000,000 shares.
In connection with the consummation of the CardioVentures Merger, Dr. Sudhir Srivastava, through Sushruta, assigned all patents, trademarks and other intellectual property used in the development, commercialization, manufacturing and sale of its medical and surgical robotic systems and products to one or more wholly owned subsidiaries of SSi.
Our principal executive offices are located at 404-405, 3rd Floor, iLabs Info Technology Centre, Udyog Vihar, Phase III, Gurugram, Haryana 122016, India. Our telephone number is +91 73375 53469. Our corporate website is https://ssinnovations.com. Information appearing on our corporate website is not part of this Annual Report and is not incorporated by reference herein. We have included our website address as an inactive textual reference only.
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Products
The SSi Mantra
The SSi Mantra Surgical Robotic System is designed to enable surgeons to perform a wide range of surgical procedures including cardiovascular, thoracic, head and neck, gynecological, urological, cancer and general surgeries. The SSi Mantra has been clinically validated for safety, efficacy and effectiveness for its intended use to perform robotically assisted surgeries in more than fifty different types of surgical procedures in India without any device related adverse events. As of the date of this Annual Report, surgeons have performed over 3,500 surgical procedures in India in a wide array of fields using the SSi Mantra, including many complex surgeries. The SSi Mantra offers the entire operating room staff three-dimensional, high definition (“3D4K”) vision, and gives the surgeon a magnified view up to ten times magnification. Our system uses specialized instrumentation, including a miniaturized surgical camera (endoscope) and wristed instruments (for example, scissors, scalpels and forceps) that are designed to help with the precise dissection and reconstruction of anatomical structures within the body. We are currently focusing our efforts on marketing our next generation SSi Mantra 3, which was introduced in June 2024.
The SSi Mantra 3 is comprised of the following components:
Surgeon Console. The SSi Mantra 3 allows surgeons to operate while comfortably seated at an ergonomic open-faced console. Surgeons use a special pair of passive 3D glasses to view a 3DHD image of the surgical field on a 32-inch 3D 4K resolution monitor with up to ten (10) times magnification, resulting in significantly enhanced vision for the surgeon. The surgeon also has a second large 23-inch 2D touch monitor for system controls and DICOM applications. The surgeon’s fingers grasp extremely precise ergonomic hand controls, with the surgeon’s hands naturally positioned relative to his or her eyes, thereby minimizing strain during the surgeon’s movements. Using electronic hardware, software, algorithms and mechanics, our technology translates the surgeon’s hand movements into precise and corresponding real-time movements of the SSi Mantra instruments positioned through surgical ports going inside of the patient. When using the SSi Mantra 3, the surgeon is able to sit in an ergonomic position and can see both the specific positioning of his or her hands and feet, thereby reducing the learning curve and maintaining comfortable ergonomics during the surgical procedure. In addition, the SSi Mantra’s robotic arms hold the camera and instruments steady, offering greater stability for surgeons and operating room staff.
Patient-Side Robotic Arm Carts. The robotic arm carts are modular in design with robotic arms mounted on individual carts, each with a maximum height of 7.2 feet. The modular design offers the flexibility of cart and robotic arm positioning to provide better placement in relation to the procedure and avoid collisions. Further, there is the option of using three, four or five robotic arm configurations based on the users’ preference and specific surgical procedures. Each robotic arm cart includes stability via parking locks, freedom of patient docking and advanced touch-screen controls. Each robotic arm cart has a built-in auto-leveling feature which allows each individual arm cart to be perfectly horizontally level with respect to uneven floor surfaces that may be present in an operating room.
Vision Cart. The vision cart provides an additional 32-inch 3D 4K resolution monitor, identical to the surgeon’s console, for the operating room staff. While wearing the 3D glasses, the entire operating team can view what the surgeon sees with the same depth perception. This ability also helps in reducing the entire team’s learning curve and translates into a safer and more efficient exchange of instruments and introduction of supplies required in surgery. The vision cart also houses the control system for the articulating endoscope and camera and pre-operative guidance software. It has uninterruptible power supply battery backup; universal safety features and incorporates the SSi Mantra multimedia recording and streaming platform.
Tele-Proctoring/Tele-Mentoring Capabilities. The SSi Mantra has a built-in live streaming platform, which provides for remote mentoring and proctoring, thereby resulting in efficient and cost-effective teaching and training capabilities.
Instruments and Accessories
We offer a comprehensive suite of stapling, energy and core instrumentation for our surgical systems, under the brand name of SSi Mudra.
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Mudra Technology. The technology employed in our instruments is designed to transform the surgeon’s natural hand movements outside of the body into corresponding controlled movements inside the patient’s body, just as would be available to the surgeon in open surgery. With our technology, a surgeon can also use “motion scaling,” a feature that translates, for example, a three-centimeter hand movement outside the patient’s body into a one-centimeter instrument movement in the surgical field inside the patient’s body. Motion scaling is designed to allow precision and control for delicate tasks. In addition, the advanced software technology of the robotic system filters and eliminates any tremors that may be present in a surgeon’s hands.
Mudra Instruments. Most of the more than 30 instruments that we manufacture incorporate Mudra technology with wristed joints for natural dexterity and tips customized for various surgical procedures. Mudra instruments are offered in an 8mm diameter. Various Mudra instrument tips include forceps, scissors, electrocautery tools, scalpels and other surgical tools that are familiar to the surgeon from open surgery and conventional minimally invasive surgery (“MIS”). We have also developed and made available a variety of cardiac surgery specific instruments. A variety of instruments may be selected and used interchangeably during surgery. All instruments are sterilizable at the hospital, and all are reusable for a defined number of procedures. A programmed memory chip inside each instrument performs several functions that help determine how the SSi Mantra and our instruments work together. In addition, the chip generally will not allow the instrument to be used for more than the prescribed number of procedures to help ensure that its performance meets specifications during each procedure.
Accessory Products. We sell various accessory products, which are used in conjunction with the SSi Mantra as surgical procedures are performed. Accessory products include sterile drapes used to help ensure a sterile field during surgery, vision products—such as replacement 3D stereo endoscopes, cannulas for the instruments and camera and special seals to prevent leakage of carbon dioxide gas used during a procedure.
Tele proctoring and Telesurgery. We are the only surgical robotic company to have received a regulatory approval from CDSCO for both tele proctoring and telesurgery. Following the demonstration of our telesurgery capabilities at the SMRSC 2024, a global conference organized by the Company, we began our clinical trials that were conducted to validate this novel approach towards remote surgery. We first conducted two animal trials at a leading laparoscopy hospital in Delhi NCR region located five kilometers away from our telesurgery lab in our facility. Thereafter, we performed a simple robotic gall bladder removal (Cholecystectomy) to demonstrate safety and efficacy of our SSi Mantra Surgical Robotic System, when utilized in a remote setting. After this trial, SSi commenced clinical trials wherein six complex urology, oncology and gynecology procedures were performed at Rajiv Gandhi Cancer Institute at a distance of approximately 35 kilometers. Most recently, we have successfully performed five robotic cardiac telesurgeries between our telesurgery lab in Gurugram and at a hospital in Jaipur located at a distance of approximately 286 kilometers, marking the world’s first accomplishment in the field of robotic cardiac surgery and in March 2025, we used the SSi Mantra 3 to perform robotic cardiac telesurgery over a 2,000-kilometer distance between SSi’s headquarters in Gurugram, and the Aster CMI Hospital in Bengaluru.
Instruments under Development
We also have a number of additional sophisticated instruments currently under development. These include:
NADI – Automated Coronary Anastomotic Connector. This instrument is a micro stapling device intended to join two arteries together in cardiac bypass procedures. We intend to offer the instrument in both robotic surgery and manual versions. The manual version is for use by cardiac surgeons who do not have a robotic system and can be utilized in an open or minimally invasive procedure.
SSi Multi-Fire Clip Applier. The SSi Multi-Fire Clip Applier is a cartridge-based clip applicator being developed to be utilized for the hemostasis of blood vessels. Use of such a device is a requirement during many surgical procedures. Currently, the clip applicators traditionally used in surgical procedures require withdrawal of the instrument after each clip is placed resulting in a time-consuming process. By providing a cartridge with multiple clips we believe the SSi Multi-Fire Clip Applier will allow for greater efficiency and time savings during surgical procedures.
SSi Robotic Stapler. We are in the process of finalizing the design and manufacturing of our SSI Robotic Stapler that would have broad applications in General Surgery, Thoracic Surgery and Oncology Surgery. Upon completion of this development, SSI would be the second company globally to have a robotic stapler that is compatible with its robotic surgical platform.
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SSi Maya - XR Pre-Operative Simulator. SSi Maya is a Mixed Reality (XR) software application being crafted to transform the educational paradigm for surgeons and surgical assistants. SSi Maya is specifically being designed to train and educate users on the intricacies of the SSi Mantra Surgical Robotic System. We intend to offer immersive and innovative pre-operative training.
SSi Holographic Anatomy. This product is an advanced augmented reality tool being developed for the purpose of visualizing anatomies, providing comprehensive patient education, and offering guidance for surgical procedures. This application will potentially present patients with three-dimensional DICOM data, enabling them to better understand and engage with their own health information.
SSi Chitrasa - Advanced DICOM Viewer. SSi Chitrasa is being designed to empower robotic surgeons with unparalleled DICOM visualization capabilities. It includes a state-of-the-art AI enabled application viewer which is seamlessly integrated with the SSi Mantra Surgical Robotic System to provide surgeons with comprehensive tools to enhance their surgical confidence and precision in the operating room.
SSi Mixed Reality Headset. The SSi Mixed Reality headset is a medical-grade device that we hope will revolutionize intraoperative experiences by seamlessly interfacing with the SSi Mantra Surgical Robotic System. This device is being designed to offer surgeons an immersive 3D endoscopic feed visualization, while interactable augmented objects provide real-time patient vitals and data for enhanced surgical precision. The potentially seamless collaboration between these technologies creates a comprehensive surgical platform, setting a new standard for intraoperative medical advancements and pushing the boundaries of surgical excellence. Some salient features include:
| ● | Peripheral view |
| ● | 1080p resolution 3DHD vision |
| ● | 32-inch image projection which allows for one meter depth perception |
| ● | Two separate left and right eye video signals projected through an optical engine onto an opaque micro-LED screen |
| ● | Natural reconstruction of the 3D image by the human brain |
SSi MantraM. In March 2025, we unveiled our Mobile Tele-Surgical Unit, the “SSi MantraM” which is designed to offer access to remote robotically-assisted surgical procedures, to geographic areas, which have only limited access to that level of healthcare.
Services
General. We have a network of field service engineers in India and maintain relationships with various distributors around the globe. This infrastructure of service and support specialists offers a full complement of services for our customers, including installation, repair, maintenance, 24/7 technical support and proactive system health monitoring.
Our comprehensive support and program assistance helps ensure customers and care teams maximize program performance and protect their investment.
Readiness and Maintenance Support. Readiness support is operational support to ensure smooth onboarding and the adoption of new systems and technology. Maintenance support helps to maximize operational efficiency and reduce unplanned equipment downtime. It includes services care plans, support teams, monitoring, software upgrades and updates, as well as a customer portal. The service care plan portfolio offers flexible service plans to ensure reliability of the systems and instruments and help optimize the robotics program. The support team of expert field service, remote technical support and customer care agents resolve and prevent any technology issues that could inhibit optimal utilization of our SSi Mantra system. Software upgrades and updates enable the latest product innovations, enhancements and reliability improvements.
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Macro Healthcare Trends
Increasing demand for healthcare: The increasing demand for healthcare in emerging markets such as India is driven by population growth and a growing middle class, rising per capita incomes, growing health insurance penetration and changing lifestyles.
These trends are resulting in patients demanding specialized, higher quality products and services, with improved efficiency and outcomes for an overall better healthcare experience. India’s healthcare industry is expected to grow from $370 billion in 2022 to $610 billion in 2026. The proportion of the Indian population in the working age-group (15–59 years of age) is expected to rise from 60.7% in 2011 to 65.1% in 2036. This demographic segment demands, and we believe is willing to spend on high-quality healthcare services.
Growing adoption of technology: Patients and hospitals are increasingly focused on improving clinical outcomes while enhancing patient experience. Hospitals aim to achieve these goals by customizing care, improving provider efficiency by lowering the amount of time required to treat patients and reducing overall costs. Shorter recovery times with robotic-assisted surgery maximizes the operational efficiency of the bed capacity, along with reduction in complications.
Significant unmet need: India has 70,000 hospitals and approximately 21 million major surgeries are performed in India every year. However, only 10,000–12,000 robotic surgeries are done in India annually, representing less than 0.1% of the global volume. Furthermore, laparoscopy is well established in India, leading to a large pool of laparoscopic surgeons. This will facilitate a faster transition from laparoscopy to robotic surgery. There is a large unmet need for surgical robotic systems that are affordable, accessible and have aftermarket support.
Increasing health insurance penetration: Health insurance coverage is an important determinant of access to and demand for healthcare services. Health insurance coverage in India has steadily grown in recent years, covering 70% of the population with nearly 950 million people with either private health insurance or government subsidized schemes such as Ayushman Bharat. Currently, Indians spend approximately 20% of their health spending as an out-of-pocket expenditure compared to 55% in 2019. Key elements of the positive transformation of India’s healthcare system are the National Health Mission, Ayushman Bharat, and medical tourism.
Medical value travel: India has emerged as a leading destination for medical tourism, attracting patients from around the world. The Indian medical tourism market was valued at $2.89 billion in 2020 and is expected to reach $13.42 billion by 2026. The medical tourism sector has emerged as a key growth driver for surgical procedures in India. The factors contributing to the growth of medical tourism include availability of advanced treatments at relatively lower costs, the availability of skilled doctors, advanced technology in private hospitals, English language proficiency and ease of travel. The Indian Government has played a pivotal role in paving the way for these international patients to enter the country and avail their desired medical treatments. It has implemented a number of policies, including the introduction of an e-Medical visa, multiple entry visas and longer stays as needed for treatment.
Favorable regulatory environment: Recently, several policy measures were implemented to drive the growth of India’s healthcare sector. These include increase in public health expenditure to 2.5% of GDP by 2025; an implementation of several large-scale and ambitious initiatives like Ayushman Bharat—the world’s largest universal health coverage scheme covering 500 million people; commitment from the Government to invest $200 billion in medical infrastructure by 2024, as well as the roll out of various schemes under the Aatma Nirbhar Bharat Abhiyaan. In particular, the Performance-Linked Incentive (PLI) Scheme and the Scheme for Promotion of Medical Device Parks offers significant financial incentives for investors to manufacture in India. A new PLI 2.0 scheme is also being prepared for promotion of the in-vitro diagnostics market.
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Our Strategy
Our initial strategy is to focus on underserved markets, such as India, where market penetration for surgical robotic systems has in large part been limited because of the high costs of and steep learning curve for existing systems. After validating the SSi Mantra Surgical Robotic System in these markets, which we believe we are currently accomplishing, we intend to leverage its advanced technology, significantly lower cost and ease of training to move into other markets, such as the United States and Europe. Key elements of this strategy include:
Focus on underserved markets. India, where our operations are based and where we have commercially launched the SSi Mantra, has a population of approximately 1.4 billion people and 70,000 hospitals. As a comparison, there are only approximately 6,120 hospitals in the U.S. However, only about 0.1% of global robotic surgical procedures are done in India. By offering our advanced, cost-effective SSi Mantra Surgical Robotic System, we believe that we can significantly penetrate the Indian market, as well as other underserved markets in Asia, Africa, Europe, Central and South America and elsewhere.
Focus on key institutions. Our marketing efforts are focused on large multi-specialty care hospitals where a majority of complex surgical procedures are performed. Following the initial placement at a given hospital, we intend to expand the number of physicians who use the SSi Mantra Surgical Robotic System and work with the hospitals and their surgeons to promote patient education as to the benefits and cost effectiveness of our system. We believe that these efforts will not only result in both increased usage and additional sales of instruments and systems at hospitals that purchase the system, but also increased demand from competing hospitals, surgeons and other physicians.
Focus on Leading Surgeons to Drive Rapid and Broad Adoption. We place significant emphasis on marketing the SSi Mantra to leading surgeons who are considered to be the “thought leaders” in their institutions and fields. In this regard, we have established both an Indian Medical Advisory Board and an International Advisory Board consisting of leading surgeons in their respective fields. We believe that the participation of these surgeons in our product development and their use of the SSi Mantra will generate confidence in many other surgeons to utilize the system for all types of surgical procedures.
Continued Development and Marketing. We intend to continue developing and enhancing our technology and products and to communicate the benefits and advantages of the SSi Mantra System (lower cost, ease of training and improved patient outcomes) in India and the other markets we plan to enter.
Evaluation, Familiarization and Training Agreements with Major Medical Facilities. We have and intend to continue entering into agreements with major medical facilities to install the SSi Mantra Surgical Robotic System for evaluation, familiarization and training purposes. As of the date of this Annual Report, we had entered into such agreements with approximately four hospital networks in India and with Johns Hopkins University in Baltimore, Maryland.
National and International Medical Conferences. We participated in many International and National Conferences during 2024 hosted by nationally accredited and internationally acclaimed bodies to help both raise awareness about the SSI Mantra surgical robotic platform and provide hundreds of surgeons with the opportunity to have an insight of our SSi Mantra system. Our first Global SMRSC (SSI Mantra Robotic Surgery Conference) that was hosted in January 2024, was attended by over 700 national and international faculty who participated over the course of the two day event and our second Global SMRSC that was hosted in March 2025, was attended by over 1,200 participants and displayed the increased capabilities of the SSi Mantra 3, including the performance of telesurgery and the introduction of our mobile robotic surgical system. At both conferences, key opinion leaders from India and abroad were given the platform to discuss not only their experience with the SSi Mantra but to foster discussions on the global potential of a very disruptive yet cost-effective surgical robotic system.
Clinical Applications
The SSi Mantra has been clinically validated for safety, efficacy and effectiveness for its intended use to perform robotically assisted surgeries in more than ninety different types of surgical procedures in India without any device related adverse events. As of the date of this Annual Report, we have installed 75 systems in India and overseas, which have been used to perform more than three thousand surgical procedures, including cardiovascular, thoracic, head and neck, gynecological, urological, cancer and general surgeries. We maintain productive collaborations with leading surgeons to explore and develop new techniques and applications for robotic-assisted surgery with the SSi Mantra. We primarily focus our development efforts on those procedures in which we believe our products bring the highest patient value, surgeon value and hospital value. Representative surgical applications are described below.
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Cardiovascular Surgery
Internal Mammary Artery Dissection. In a coronary artery bypass graft procedure used in cardiac surgery, a blocked coronary artery is bypassed with a graft. When available, an artery from the chest called the internal mammary artery is dissected from its natural position and grafted into place to perform the bypass. Because the internal mammary artery is located inferior to the anterior surface of the chest, dissection of the vessel is challenging using existing surgical instruments through the three- to five-inch incision commonly used in a non-robotic coronary artery bypass graft procedure. Our products have multiple joints that emulate the surgeon’s shoulders and elbows, allowing exact positioning of the instruments inside the patient’s chest. In addition, our Mudra instrument joints are designed to permit the surgeon to reach behind the tissues for easier dissection of the internal mammary artery. Thus, we believe that the internal mammary artery can be dissected with greater ease and precision using the SSi Mantra Surgical Robotic System.
Totally Endoscopic Coronary Artery Bypass Surgery (TECAB). Coronary artery bypass graft surgery demands that the surgeon delicately dissect and precisely suture very small structures, which are less than two millimeters in diameter, under significant magnification. These procedures are difficult when performed in open surgery. They are even more difficult when performed using a limited incision approach and can be challenging to perform when the heart is beating. As a result, this procedure is typically done as open surgery by stopping the heart and using a heart/lung bypass machine. The technology employed by the SSi Mantra is designed to allow surgeons to perform scaled instrument movements that can be even more precise than the movements used in open surgery, thus enabling precise suturing of single and multiple coronary vessels on a stopped or beating heart.
Mitral and Aortic Valve Repair/Replacement. Valve repair and replacement surgeries are challenging even when using open surgical techniques. Significant exposure of the surgical field is essential to the identification and precise manipulation of valves and other structures inside the heart and is key to successful surgical outcomes with minimal complications. Motion scaling allows a surgeon using the SSi Mantra to maneuver instruments inside the patient even more precisely than is possible in open surgery. The SSi Mantra has enabled heart valve repairs to be performed through small ports in a manner that could not have been accomplished with open surgery.
Thoracic Surgery
Conventional approaches to surgical procedures in the thorax include both open and video-assisted thoracoscopic approaches. Procedures performed via these methods include pulmonary wedge resection, pulmonary lobectomy, thymectomy, mediastinal mass excision and esophagectomy.
Head and Neck Surgery
Transoral Surgery. Head and neck cancers are typically treated by either surgical resection or chemo-radiation, or a combination of both. Surgical resection performed by an open approach may require a “jaw-splitting” mandibulotomy. This procedure, while effective in treating cancer, is potentially traumatic and disfiguring to the patient. Less invasive approaches via the mouth (transoral surgery) are challenged by line-of-sight limitations dictated by conventional endoscopic tools. Chemo-radiation as a primary therapy does allow patients to avoid traumatic surgical incisions; however, the literature suggests that this modality diminishes patients’ ability to speak and swallow normally. Robotically assisted transoral surgery allows them to operate on tumors occurring in the oropharynx (i.e., tonsil and base of tongue) and larynx via the mouth and to overcome some of the line-of-sight limitations of conventional transoral surgery.
Gynecologic Surgery
Hysterectomy. Removal of the uterus is one of the most performed surgeries in gynecology and is performed for a variety of underlying benign and cancerous conditions. Hysterectomies can be performed using open surgery or minimally invasive techniques, which include vaginal, laparoscopic, and robotic-assisted approaches. We believe that robotic-assisted surgery with the SSi Mantra provides patients with the opportunity to receive a minimally invasive treatment as an alternative to an open hysterectomy.
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Sacro colpopexy. The abdominal (open) Sacro colpopexy is one of the operations performed to treat vaginal vault prolapse. Sacro colpopexy involves suturing a synthetic mesh that connects and supports the vagina to the sacrum (tailbone). A Sacro colpopexy can be performed using a conventional laparoscopic technique; however, it is often difficult and cumbersome to perform. Robotic assisted surgical capabilities enable a larger number of these procedures to be performed through a minimally invasive technique, conferring the benefits of minimally invasive surgery to a broader range of Sacro colpopexy patients.
Urologic Surgery
Prostatectomy. Radical prostatectomy is the removal of the prostate gland and accompanying lymph nodes in patients diagnosed with clinically localized prostate cancer. The standard approach to the removal of the prostate was via an open surgical procedure. The conventional laparoscopic approach is an option, but it is difficult and poses challenges to even the most skilled urologist. The SSi Mantra will enable a larger number of surgeons to convert from using an open surgical technique to a minimally invasive robotic surgical technique.
Partial Nephrectomy. Partial nephrectomy is the removal of a small portion of a kidney (typically, an area of the kidney containing a tumor). Partial nephrectomies are most commonly performed in patients diagnosed with clinically localized renal cancer. Excluding robotic-assisted surgery, there are three common surgical approaches to performing partial nephrectomies: open surgical technique, laparoscopy, and hand-assisted laparoscopy, which is a hybrid of open surgery and laparoscopic techniques. Robotic assisted surgical capabilities may enable a large number of these procedures to be performed through a minimally invasive technique, conferring the benefits of minimally invasive surgery to a broader range of partial nephrectomy patients.
Radical Nephrectomy. Radical nephrectomy is a surgery to remove the entire kidney, typically done to treat kidney cancers and occasionally or other reasons. In some instances, the adrenal gland and lymph nodes may be removed as well.
Cystectomy. Robotic-assisted cystectomy is a minimally invasive bladder surgery with the same cancer removal success as open surgery. During robotic cystectomy, robotically trained urology surgeons remove the bladder and redirect the urinary tract using a surgical robot. A robotic cystectomy is performed through a series of small keyhole-sized incisions across the abdomen, which is less painful, heals faster, and produces significantly less surface scarring than the larger incision associated with open surgery.
General Surgery
Hernia Repair. A hernia occurs when an organ or other tissue squeezes through a weak spot in a surrounding muscle or connective tissue. During hernia repair surgery, the weakened tissue is secured, and defects are repaired. Common types of hernias are ventral and inguinal. Ventral, or abdominal hernia, may occur through a scar after surgery in the abdomen. Inguinal hernia is a bulge in the groin and is more common in men.
Colorectal Surgery. These procedures typically involve benign or cancerous conditions of the lower digestive system, in particular the rectum or colon. Common procedures in this area include hemicolectomy, sigmoidoscopy, low anterior resection and abdominoperineal resection.
Cholecystectomy. Cholecystectomy, or the surgical removal of the gall bladder, is a commonly performed general surgery procedure. Cholecystectomy is the primary method for the treatment of gallstones and other gall bladder diseases. Most cholecystectomies are performed using multi-port MIS techniques, although some surgeons choose to perform cholecystectomies using manual single-port instrumentation.
The Global Robotic Surgery Market
General
The global surgical robotics market valued at 9.6 billion in 2023 is forecasted to grow at a robust CAGR of 16.5% reaching US$23.7 billion by 2029*. Surgical robots offer significant advantages in minimally invasive surgery by enabling exceptionally precise manipulation of surgical instruments within constrained operation spaces, surpassing human capabilities. Robotic surgery is a procedure which involves a minimally invasive spectrum and represents an evolution in practice across numerous medical disciplines. Surgical robotics technology is used across various medical specialties, enabling surgeons to perform complex procedures through small incisions, resulting in reduced patient trauma, shorter recovery times, and enhanced patient outcomes. Surgeries conducted utilizing robotic systems are expected to grow by approximately 400%, from 1.6 million surgeries in 2020 to 6.2 million surgeries by 2030.
| (*Source: | https://www.marketsandmarkets.com/Market-Reports/surgical-robots-market-256618532.html) |
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Market Dynamics
Increase in demand and acceptance of laparoscopic or minimally invasive surgery (“MIS”) due to the benefits to patients and surgeons, such as better screening, greater precision, shorter hospitalization, reduced pain and discomfort has fueled the growth in the global surgical robotics market. In addition, the surge in the number of gynecological, neurological and urological diseases is a primary factor driving the surgical robotics market growth.
In addition, surgical robotics enable minimally invasive procedures, which involve smaller incisions, reduced trauma to surrounding tissues, and quicker recovery times. Patients are increasingly seeking procedures that result in less pain and shorter hospital stays, and surgical robots fulfill these demands and the rise in adoption of minimally invasive procedures has fueled market growth.
Many surgical robotic systems incorporate advanced visualization technologies, such as high-definition 3D imaging and augmented reality. These technologies grant surgeons a clearer view of the surgical site, enhancing their ability to visualize complex anatomical structures and perform intricate tasks. The growth of the surgical robotics market is expected to be driven by the availability of improved healthcare infrastructure, increase in unmet healthcare needs, rise in prevalence of chronic diseases, and surge in demand for advanced surgical robotics products.
Furthermore, the increase in need for automation in the healthcare industry and the shifting trend towards advanced robotic surgeries fuels market growth. Moreover, untapped economies such as Brazil, India, China and other developing economies create a lucrative surgical robotics market opportunity.
The demand for surgical robotics is not only limited to developed countries such as the U.S. but is also being witnessed in the developing countries, such as China, and India, which fuel the growth of the market. Factors such as the rise in the number of surgeries drive the adoption of robotic technologies across different specialties, contributing to the robust growth of the surgical robotics market. For instance, according to the National Center for Biotechnology and Information (NCBI), in 2022, around 1,918,030 new cancer cases are projected to occur in the United States. In light of this projection, the number of cancer surgeries performed by the subspecialty of robotic oncology surgeons is also expected to increase drastically as well.
Furthermore, as the global population ages, we expect that there will be a greater need for surgical interventions to address age-related health conditions which boosts market growth. Surgical robots assist surgeons in handling the complexities of these procedures, allowing for safer and more effective outcomes in elderly patients. Moreover, initially limited to specific procedures, robotic technologies are now being adapted for a broader spectrum of surgeries across various medical fields, including cardiac, neurology, urology, gynecology, and more. This versatility attracts hospitals and clinics to aim to offer comprehensive robotic surgical services which is expected to drive the market growth.
High initial costs associated with acquiring and implementing robotic systems, including infrastructure and training, pose a financial challenge for many healthcare facilities which may impede market growth. Regulatory complexities and concerns regarding patient safety, as well as the need for rigorous clinical validation of robotic procedures, slow down the adoption process. In addition, the intricate nature of surgical robotics necessitates specialized training for surgeons, potentially leading to a shortage of skilled professionals. These factors collectively hinder the rapid expansion of the surgical robotics market.
Segmental Overview
The surgical robotics industry is segmented into components, surgery type, and region. By component, the market is categorized into systems, accessories, and services. Based on surgery type, the market is segregated into gynecology surgery, urology surgery, neurosurgery, orthopedic surgery, general surgery, and other surgeries. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, Latin America, the Middle East and Africa (“LAMEA”).
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By Component
With a consistently expanding installed base of surgical robotic systems globally and increasing utilization thereof, the accessories and services segment dominated the global surgical robotics market in 2022 and is expected to remain dominant throughout the forecast period, due to a further rise in the number of surgical robotics procedures performed with precision, accuracy, and improved patient outcomes, coupled with the increased adoption of surgical robotics technology. However, the systems segment is expected to register the highest CAGR during the forecast period, owing to a rise in technological advancements and an increase in demand for advanced robotic surgical systems.
By Surgery Type
The general surgery segment dominated the global surgical robotics market share in 2024 and is anticipated to continue this trend during the forecast period. This is attributed to versatility and effectiveness of surgical robotics in a wide range of general surgery procedures, increase in patient demand for minimally invasive surgeries, and ongoing advancements in technology.
By Region
The surgical robotics market size is analyzed across North America, Europe, Asia-Pacific, and LAMEA. North America accounted for a major share of the surgical robotics industry in 2024 in terms of the number of surgical robotic systems installed and is expected to maintain its dominance during the forecast period. In addition, the presence of well-established healthcare infrastructure, high purchasing power, and rise in adoption rate of advanced surgical robotics products are expected to drive the market growth. Furthermore, product launch, collaborations, and acquisitions adopted by the key players in this region boost the growth of the market.
Asia-Pacific is expected to grow at the highest rate during the surgical robotics market forecast period. The market growth in this region is attributable to the growing industrial infrastructure, the rise in prevalence of chronic diseases, such as cancer and cardiovascular conditions which has driven the need for sophisticated surgical interventions, which surgical robotic systems can provide. Moreover, the increase in awareness and acceptance of minimally invasive procedures among patients in the Asia-Pacific region along with the benefits offered by surgical robotics further propels the market growth in this region.
India
Within the Asia-Pacific region, India, being the fastest growing economy, rising incomes and significant unmet need for high-quality healthcare services is potentially a key driver for the growth of surgical robotics in the country. While India’s healthcare sector is poised to grow from $110 billion in 2016 to $610 billion in 2026, its healthcare spending as a percentage of GDP is expected to grow from 3% to 6% and the ratio of insured households is expected to grow from 37% to 69% between 2023 and 2030. Similarly, India’s ratio of out-of-pocket healthcare spending is also expected to decline from 55% in 2023 to 36% in 2030, as the result of increased insurance penetration.
Historically, the lack of investment in healthcare infrastructure in India, has led it to lag World Health Organization (“WHO”) standards in terms of the number of hospital beds and physicians per 1,000 population. In the last several years, with the increasing burden of lifestyle diseases and additional factors such as increasing medical value travel, a systemic shift has occurred in India with a renewed focus on increasing healthcare spending. This trend is reflected in a 19.7% increase in hospital industry revenue from 2020 to 2023 and a 34.8% increase in hospital industry EBIDTA during the same period.
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Sales, Marketing and Customer Support
Sales Model
We provide our products through a direct sales organization in India and, outside of India, through an expanding distributor network that, as of December 31, 2024, included distributors in Colombia, Ecuador, Guatemala, Indonesia, the Philippines, the United Arab Emirates, CIS Countries, the Baltic Region, Greece, Cyprus, Sri Lanka, Bangladesh, Nepal, Oman, and Australia.
Our direct sales organization is composed of a capital sales team of ten individuals, who are responsible for selling systems, and a clinical support team of thirty individuals, which is responsible for supporting the systems used in procedures performed at our hospital accounts. Our hospital accounts include both individual hospitals and healthcare facilities as well as hospitals and healthcare facilities that are part of an integrated chain. The initial system sale into an account is a major capital equipment purchase by our customers and typically has a lengthy sales cycle that can be affected by evaluation periods, macroeconomic factors, capital spending prioritization, the timing of budgeting cycles and competitive bidding processes. Capital sales activities include educating surgeons, physicians and other hospital staff across multiple specialties on the benefits of robotic-assisted surgery with the SSi Mantra, total treatment costs and the clinical applications that our technology enables. We also train our sales organization to educate hospital management on the potential benefits of adopting our system, including the clinical benefits of robotic-assisted surgery with the SSi Mantra, such as improved patient outcomes.
Our clinical sales team works onsite at hospitals, interacting with surgeons and physicians, operating room staff and hospital administrators to develop and sustain successful robotic-assisted surgery. They assist the hospital in identifying surgeons or physicians who have an interest in robotic-assisted surgery and the potential benefits provided by the SSi Mantra. Our clinical sales team provides current clinical information on robotic-assisted surgery and new product applications to the hospital teams.
We offer our SSi Mantra through three selling models— outright purchase, purchase on a deferred or installment payment basis, and purchase on a pay per procedure basis.
In cases where the systems are installed on pay per procedure basis, the Company earns revenue share which is a mix of fixed and variable components. Variable components consist 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 title for the system is not getting transferred to the customer, the cost relating to those systems is capitalized under property, plant and equipment and accordingly depreciation is charged over its period of useful life.
Our customers place orders to replenish their supplies of instruments and accessories on a regular basis. New direct customers who purchase a system typically place an initial stocking order of instruments and accessories soon after they receive their system.
To date, substantially all of our sales have been in India, with one sale each in the United Arab Emirates, Ecuador, Nepal and Indonesia.
Training and Customer Support
We also provide training for surgeons, physicians and staff on the operation and use of the SSi Mantra using a variety of training approaches. These include didactic modules training, hands on training, dry runs with the surgeons and their entire team, in-person proctored initial cases, on-site support for additional cases and remote proctoring support for complex cases. With respect to sale of surgical robotic systems, training is provided at the time of delivery to the end customer, however the effort involved is considered negligible.
We have a network of field service and technical support engineers in India and are establishing relationships with various distributors around the globe where we intend to market and sell the SSi Mantra. This infrastructure of service and support specialists, along with advanced service tools and solutions, offers a full complement of services for our customers, including installation, repair, maintenance, 24/7 technical support and proactive system health monitoring.
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Research and Development
We focus our research and development efforts on enhancing and improving our products and services with a view to fulfilling our vision that the benefits of advanced robotic surgery should be cost-effective and available to everyone. Through ingenuity and intelligent technology, we believe that we can expand the potential of physicians to heal without constraints due to both cost and accessibility of these technologies. We employ engineering and research and development staff and currently have a research and development team of 65 employees to focus on delivering future innovations and sustaining improvements that advance our mission.
Manufacturing
Our systems and instruments are manufactured by our employees at our approximately 70,000 square-feet facility in Gurugram, Delhi NCR, India. The manufacturing of our products is a complex operation involving a number of separate processes and components.
We purchase both custom and off-the-shelf components from a large number of suppliers from both within India and overseas and subject them to stringent quality specifications, inspections, and processes. Some of the components necessary for the assembly of our products are currently provided to us by sole-sourced suppliers (the only recognized supply source available to us) or single-sourced suppliers (the only approved supply source for us among other sources). We believe, however, that alternative suppliers are available if it should become necessary, although no assurance can be given that we could secure such alternative sources of supply, if required, on commercially reasonable terms or without undue operational disruption.
We purchase the majority of our components and major assemblies through purchase orders rather than long-term supply agreements and generally do not maintain large volumes of finished goods relative to our anticipated demand.
Subject to receipt of necessary financing, we plan to expand our in-house manufacturing capacity in order to meet anticipated increases in demand and to reduce our reliance on third-party suppliers.
Competition
We face competition in the forms of existing open surgery, conventional MIS, drug therapies, radiation treatment and other emerging diagnostic and interventional surgical approaches. Our success depends on continued clinical and technical innovation, quality and reliability, as well as educating hospitals, surgeons and patients on the demonstrated results associated with robotic-assisted medical procedures using our SSi Mantra Surgical Robotic System and its efficacy and cost-effectiveness relative to other techniques.
We compete with a number of U.S. and foreign companies that have developed and currently manufacture and market products in the field of robotic-assisted medical procedures, including but not limited to: Intuitive Surgical, Inc.; Asensus Surgical, Inc.; avateramedical GmbH; CMR Surgical Ltd.; Johnson & Johnson; Medicaroid Corporation; Medrobotics Corporation; Medtronic plc; meerecompany Inc.; Olympus Corporation; Samsung Electronics Co., Ltd; Shandong Weigao Group Medical Polymer Company Ltd.; Shanghai Microport Medbot (Group) Co., Ltd.; and Titan Medical Inc. Most, if not all of these companies have longer operating histories and greater financial resources than SSi. In addition, other companies with substantial experience in industrial robotics could potentially expand into the field of medical robotics and become competitors.
Our failure to compete effectively with these existing and potential competitors could adversely affect our results of operations, business and prospects.
Intellectual Property
We place considerable importance on obtaining and maintaining patent, copyright, and trademark protection for our technologies, products and processes.
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We generally rely upon a combination of intellectual property laws, confidentiality procedures and contractual provisions to protect our proprietary technology. For example, we have patents and trademarks, both registered and unregistered, that provide distinctive identification of our products in the marketplace.
As of the date of this Annual Report, our intellectual property portfolio consists of 5 granted utility patents and 65 pending utility patent applications, and 10 PCT international WIPO applications as follows:
| Granted | Pending | |||||||||||||
| Country | No. of Patents | Earliest Expiration | Latest Expiration | No. of Patents | Earliest Expiration | Latest Expiration | Product | |||||||
| Europe | 5 | February 8, 2043 | December 1, 2043 | MANTRA | ||||||||||
| Europe | 1 | June 9, 2043 | June 9, 2043 | MAYA | ||||||||||
| India | 4 | January 28, 2042 | June 28, 2042 | 15 | March 3, 2042 | October 11, 2044 | MANTRA | |||||||
| India | 3 | March 31, 2043 | December 1, 2043 | MANTRA & MAYA | ||||||||||
| India | 1 | June 10, 2042 | June 10, 2042 | 1 | July 27, 2043 | July 27, 2043 | MAYA | |||||||
| India | 6 | September 28, 2041 | March 17, 2045 | MUDRA | ||||||||||
| USA | 10 | January 28, 2043 | December 27, 2044 | MANTRA | ||||||||||
| USA | 1 | July 15, 2044 | July 15, 2044 | MANTRA & MAYA | ||||||||||
| USA | 1 | June 9, 2043 | June 9, 2043 | MAYA | ||||||||||
| USA | 1 | November 4, 2042 | November 4, 2042 | MUDRA | ||||||||||
| Japan | 2 | September 19, 2044 | December 27, 2044 | MANTRA | ||||||||||
| Japan | 1 | August 2, 2044 | August 2, 2044 | MANTRA & MAYA | ||||||||||
| Korea | 2 | September 19, 2044 | December 27, 2044 | MANTRA | ||||||||||
| Korea | 1 | August 2, 2044 | August 2, 2044 | MANTRA & MAYA | ||||||||||
| Singapore | 2 | September 19, 2044 | December 27, 2044 | MANTRA | ||||||||||
| Singapore | 1 | August 2, 2044 | August 2, 2044 | MANTRA & MAYA | ||||||||||
| Australia | 2 | September 19, 2044 | December 27, 2044 | MANTRA | ||||||||||
| Australia | 1 | August 2, 2044 | August 2, 2044 | MANTRA & MAYA | ||||||||||
| Israel | 2 | September 19, 2044 | December 27, 2044 | MANTRA | ||||||||||
| Israel | 1 | August 2, 2044 | August 2, 2044 | MANTRA & MAYA | ||||||||||
| BRAZIL | 3 | February 08, 2043 | December 27, 2044 | MANTRA | ||||||||||
| BRAZIL | 1 | July 15, 2044 | July 15, 2044 | MANTRA & MAYA | ||||||||||
| INDONESIA | 1 | October 20, 2043 | October 20, 2043 | MANTRA | ||||||||||
| INDONESIA | 1 | June 09, 2043 | June 09, 2043 | MAYA | ||||||||||
| Total | 5 | 65 | 70 | |||||||||||
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Further, our intellectual property portfolio also consists of 10 PCT international WIPO applications as follows:
| Granted | Pending | |||||||||||||
| Country | No. of Patents |
Earliest Expiration |
Latest Expiration |
No. of Patents |
Earliest Expiration |
Latest Expiration |
Product | |||||||
| WIPO | 7 | May 21, 2025 | December 9, 2026 | MANTRA | ||||||||||
| WIPO | 1 | February 27, 2026 | February 27, 2026 | MAYA | ||||||||||
| WIPO | 2 | October 31, 2025 | June 10, 2026 | MANTRA & MAYA | ||||||||||
| Total | 10 | 10 | ||||||||||||
Further, our intellectual property portfolio also consists of 30 granted design patents and 4 pending design patent application as follows:
| Granted | Pending | |||||||||||||
| Country | No. of Patents |
Earliest Expiration |
Latest Expiration |
No. of Patents |
Earliest Expiration |
Latest Expiration |
Product | |||||||
| India | 23 | January 31, 2038 | September 27, 2039 | 1 | December 20, 2038 | December 20, 2038 | MANTRA | |||||||
| India | 7 | August 29, 2038 | December 23, 2039 | 3 | October 25, 2039 | March 17, 2040 | MUDRA | |||||||
| Total | 30 | 4 | 34 | |||||||||||
In addition, we have filed 93 applications for trademark registrations in India of which 40 have been registered. Further, we have filed 31 applications for trademark registrations through both Madrid and direct foreign filings of which 13 have been registered.
We have also filed two copyright applications, both of which have been granted.
We intend to apply for additional utility patents, designs and trademarks in various jurisdictions.
Notwithstanding the foregoing, we cannot be certain as to the scope of protection that the patents granted will afford our technology and products, nor can we be certain that any pending or future patent applications will be granted. Furthermore, if any protection we obtain is reduced or eliminated, others could use our intellectual property without compensating us, resulting in harm to our business. In addition, others may assert that our products infringe on their intellectual property rights, which may cause us to engage in costly disputes and, if we are not successful in defending ourselves, could also cause us to pay substantial damages and prohibit us from selling our products.
None of our patents and patent applications are licensed to or from third parties.
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Government Regulation
General
Our products and operations are subject to regulation in India by the Central Drugs Standard Control Organization (the “CDSCO”), by the Food and Drug Administration (the “FDA”) in the U.S. and by similar agencies in other countries and regions in which we market or plan to market our products. In addition, our products must meet the requirements of a large and growing body of international standards, which govern the design, manufacture, materials content and sourcing, testing, certification, packaging, installation, use and disposal of our products. We must continually keep abreast of these regulations, standards and requirements and integrate our compliance into the development and regulatory documentation for our products. Failure to meet these standards could limit our ability to market our products in those regions that require compliance with such standards. Examples of standards to which we are subject include ISO 13485, an internationally recognized quality management system for the design, development and manufacture of medical devices.
ISO 13485 Quality Management System
ISO 13485 is an internationally recognized quality management system for the design, development and manufacture of medical devices. It sets out the requirements for a quality management system specific to the medical device industry. This standard is designed to be used by manufacturers throughout the life cycle of a medical device. We are required to meet this standard to register our products for sale globally and are subject to rigorous annual reassessment and audit procedures.
Our Company has developed a Harmonized ISO 13485 QMS system in line with EN ISO 13485 and 21 CFR 820, for compliance with U.S. and European Union (“EU”) quality management systems requirements.
We received ISO 13485 certifications in 2021. During the course of 2024, we conducted recertification audit from EU Notified Body for EN ISO 13485 and ISO 13485 and we received the certification in Q4 of 2024.
India Regulation
Medical devices in India had been mostly unregulated for a long time but that has changed in recent years, with the adoption of rules and regulations designed to improve and enhance patient safety. Our products are primarily regulated under the Indian Medical Device Rules, 2017, as amended by the Medical Device (Amendment) Rules, 2020 (as amended, the “IMDR”) promulgated and administered by the CDSCO. These rules cover various aspects of medical device related regulations, including classification, registration, manufacturing and import, labeling, sales, and post-market requirements. Similar to rules in the EU, they mandate that devices are safe and perform their intended function.
Based on intended use of the device, the risks associated with the device and other parameters referred to in the IMDR, the Central Licensing Authority of India classifies Medical Devices into four risk classes: A (low risk); B (low moderate risk); C (moderate high risk); and D (high risk).
The CDSCO has further divided the device classifications into 24 panels, where our surgical robotic system is classified as a Class B device pertaining to operating room procedures. This license has been updated to Class C to be in line with the international classification System.
We currently have CDSCO approval for the manufacture, sale and distribution of our products under Class C including the Telesurgery approvals and a license to export our products from India.
In December 2024 we became the first and only company in India to receive CDSCO regulatory approval for telesurgery and tele proctoring capabilities of a surgical robotic system.
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U.S. Regulation
Our products will be subject to regulation as medical devices in the United States under the Federal Food, Drug, and Cosmetic Act (“FFDCA”), as implemented and enforced by the FDA. The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, recordkeeping, complaint and adverse event reporting, clearance, approval, certification, promotion, marketing, export, import, distribution and service of medical devices in the U.S. to ensure that medical devices distributed domestically are safe and effective for their intended uses.
We have filed a pre-submission application with the U.S. FDA, requesting feedback on the SSi Mantra. We had a feedback meeting with the FDA on April 2, 2024, and the FDA has indicated that we should pursue the Investigational Device Exemption (“IDE”) route to obtain U.S. approval to market. Currently, we are in the process of preparation of the IDE Application and expect to start our U.S. IDE study in third quarter of 2025, subject to FDA IDE and Institutional Review Board (“IRB”) approvals There can be no assurance that we will receive FDA approval to market the SSi Mantra through the IDE route, that we will need to undertake a different path as set forth below or that we will ever receive FDA approval to market.
Under the FDA’s regulatory scheme, medical devices are classified into one of three classes—Class I, Class II or Class III, depending on the degree of risk associated with each medical device and the extent of control needed to ensure safety and effectiveness. We believe that our current SSi Mantra Surgical Robotic System and other products will be classified as Class II medical devices.
Class II medical devices are those that are subject to general controls, and most require premarket demonstration of adherence to certain performance standards, as specified by the FDA, and special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device. These special controls can include performance standards, post-market surveillance, patient registries and FDA guidance documents.
Manufacturers of most Class II devices are required to submit to the FDA a premarket notification under Section 510(k) of the FFDCA requesting authorization to commercially distribute the device. The FDA’s authorization to commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance. Our current products are expected to be subject to premarket notification and clearance under section 510(k) of the FFDCA. To obtain 510(k) clearance, we must submit to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a legally marketed predicate device.
The FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence. In addition, the FDA collects user fees for certain medical device submissions and annual fees for medical device establishments.
If the FDA agrees that the device is substantially equivalent to a predicate device, it will grant clearance to commercially market the device in the U.S. The FDA has a statutory ninety-day (90-day) period to respond to a 510(k) submission; however, as a practical matter, clearance often takes longer. The FDA may require further information, including clinical data, to make a determination regarding substantial equivalence. If the FDA determines that the device, or its intended use, is not “substantially equivalent” to a predicate device, the device may be designated as a Class III device. The device sponsor must proceed with and fulfill the requirements of the more rigorous requirements of the premarket approval (“PMA”) process or can request a risk-based classification determination for the device in accordance with the de novo classification pathway, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.
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The PMA process is more demanding than the 510(k) premarket notification process. In a PMA application, the manufacturer must demonstrate that the device is safe and effective, and the PMA application must be supported by extensive data, including data from preclinical studies and human clinical trials. The FDA, by statute and regulation, has 180 days to review a PMA application, although the review more often occurs over a significantly longer period of time and can take up to several years. In approving a PMA application or clearing a 510(k) submission, the FDA may also require some additional manufacturing controls, design control activities and approvals, as well as specific post-market surveillance requirements when necessary to protect the public health or to provide additional safety and effectiveness data for the device. In such cases, the manufacturer might be required to follow certain patient groups for a number of years and make periodic reports to the FDA on the clinical status of those patients.
Clinical trials are almost always required to support a PMA and are sometimes required to support a 510(k) submission. All clinical investigations designed to determine the safety and effectiveness of a medical device must be conducted in accordance with the FDA’s investigational device exemption (“IDE”) regulations, which govern investigational device labeling, prohibit the promotion of the investigational device and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. Regardless of the degree of risk presented by the medical device, clinical studies must be approved by, and conducted under the oversight of, an Institutional Review Board (“IRB”) for each clinical site. During a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, trial monitoring, selecting clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of investigation devices or on making safety or effectiveness claims for them. The clinical investigators in the clinical study are also subject to the FDA’s regulations and must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition of the investigational device and comply with all reporting and recordkeeping requirements. Additionally, after a trial begins, we, the FDA, or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to studying subjects outweigh the anticipated benefits.
After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification in its intended use, will require a new 510(k) clearance or depending on the modification, PMA approval or de novo classification. The FDA requires each manufacturer to determine whether the proposed change requires submission of a 510(k), de novo classification or a PMA in the first instance, but the FDA can review any such decision and disagree with the manufacturer’s determination. If the FDA disagrees with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until 510(k) marketing clearance, approval of a PMA or issuance of a de novo classification. Also, in these circumstances, the manufacturer may be subject to significant regulatory fines or penalties.
In addition, the FDA may place significant limitations upon the intended use of our products as a condition of granting marketing authorization. Moreover, after a device is placed on the market, numerous FDA and other regulatory requirements continue to apply. These requirements include establishment registration and device listing with the FDA; compliance with medical device reporting regulations, which require that manufacturers report to the FDA if their device caused or contributed, or may have caused or contributed, to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur; compliance with corrections and removal reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FFDCA that may present a risk to health; the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device. In addition, the FDA and the Federal Trade Commission also regulate the advertising and promotion of our products to ensure that the claims we make are consistent with our regulatory clearances, that there is scientific data to substantiate the claims and that our advertising is neither false nor misleading. In general, we may not promote or advertise our products for uses not within the scope of our intended use statement in our clearances or make unsupported safety and effectiveness claims.
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In the U.S., our manufacturing processes will be required to comply with the Quality System Regulation (“QSR”). The QSR covers, among other things, the methods used in, and the facilities and controls used for, the design, testing, controlling, documenting, manufacture, packaging, labeling, storage, installation and servicing of all medical devices intended for human use. The QSR also requires maintenance of extensive records, which demonstrate compliance with the FDA regulations, the manufacturer’s own procedures, specifications and testing, as well as distribution and post-market experience. Compliance with the QSR is necessary for a manufacturer to be able to continue to market cleared or approved product offerings in the U.S. A company’s facilities, records and manufacturing processes are subject to periodically scheduled or unscheduled inspections by the FDA. Failure to maintain compliance with applicable QSR requirements could result in the shut-down of, or restrictions on, manufacturing operations and the recall or seizure of marketed products. If the FDA determines that a manufacturer has failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions:
| ● | warning letters, untitled letters, fines, injunctions, consent decrees, administrative penalties, and civil or criminal penalties; |
| ● | recalls, withdrawals, or administrative detention or seizure of our products; |
| ● | operating restrictions or partial suspension or total shutdown of production; |
| ● | refusing or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified products; |
| ● | withdrawing 510(k) clearances or PMA approvals that have already been granted; |
| ● | refusal to grant export approvals for our products; or |
| ● | criminal prosecution. |
In addition, the discovery of previously unknown problems with any marketed products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.
Products manufactured outside of the U.S. by or for us are subject to U.S. Customs and FDA inspection upon entry into the U.S. We must demonstrate compliance of such products with U.S. regulations and carefully document the eventual distribution or re-exportation of such products. Failure to comply with all applicable regulations could prevent us from having access to products or components critical to the manufacture of finished products and lead to shortages and delays.
European Union Regulation
In the European Union (the “EU”), all medical devices placed on the EU market must meet the essential requirements (“Essential Requirements”), including the requirement that a medical device must be designed and manufactured in such a way that it will not compromise the clinical condition or safety of patients or the safety and health of users and others. In addition, the device must achieve the performance intended by the manufacturer and be designed, manufactured and packaged in a suitable manner.
All medical devices are currently regulated by Regulation (EU) No 2017/745 (the “EU Medical Devices Regulation” or the “MDR”), which became effective on May 26, 2021 and replaced the former regulatory framework set forth in Council Directive 93/42/EEC (the “MDD”).
We have been in discussions with an EU Notified body for CE certification, which will allow us to market the SSi Mantra in the EU. We expect to submit our CE application submission in the second quarter of 2025. There can be no assurance that we will receive CE certification.
The MDR was adopted with the aim of ensuring better protection of public health and patient safety. The MDR establishes a uniform, transparent, predictable and sustainable regulatory framework across the EU for medical devices and ensures a high level of safety and health while supporting innovation. Unlike directives, regulations are directly applicable in EU member states without the need for member states to implement them into national law. This aims to increase harmonization across the EU member states.
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The MDR requires that, before placing a device on the market, other than a custom-made device, manufacturers (as well as other economic operators, such as authorized representatives and importers) must register by submitting identification information to the EUDAMED electronic system, which is in the process of being implemented. The information to be submitted by manufacturers (and authorized representatives) also includes the name, address and contact details of the person or persons responsible for regulatory compliance. The MDR also requires that, before placing a device on the market, other than a custom-made device, manufacturers must assign a unique identifier to the device and provide it along with other core data to the unique device identifier (“UDI”) database.
All manufacturers placing medical devices on the market in the EU must comply with the EU medical device vigilance system. Under this system, serious incidents and Field Safety Corrective Actions (“FSCAs”) must be reported to the relevant authorities of EU member states. These reports are to be submitted through EUDAMED (once fully functional) and aim to ensure that, in addition to reporting to the relevant authorities of the EU member states, other actors, such as the economic operators in the supply chain, will also be informed. Until EUDAMED is fully functional, the corresponding provisions of the MDD continue to apply. Manufacturers are required to take FSCAs, which are defined as any corrective action for technical or medical reasons to prevent or reduce the risk of a serious incident associated with the use of a medical device that is made available on the market.
The advertising and promotion of medical devices is subject to some general principles set forth in EU legislation. According to the MDR, only devices that are CE (Conformité Européene) marked may be marketed and advertised in the EU in accordance with their intended purpose. Directive 2006/114/EC concerning misleading and comparative advertising and Directive 2005/29/EC on unfair commercial practices, while not specific to the advertising of medical devices, also apply to the advertising thereof and contain general rules, such as, for example, requiring that advertisements are evidenced, balanced and not misleading. Specific requirements are defined at a national level. EU member states’ laws related to the advertising and promotion of medical devices, which vary between jurisdictions, may limit or restrict the advertising and promotion of products to the general public and may impose limitations on promotional activities with healthcare professionals.
Many EU member states have adopted specific anti-gift statutes that further limit commercial practices for medical devices, in particular vis-à-vis healthcare professionals and organizations. Additionally, there has been a recent trend of increased regulation of payments and transfers of value provided to healthcare professionals or entities and many EU member states have adopted national “Sunshine Acts,” which impose reporting and transparency requirements (often on an annual basis), similar to the requirements in the United States, on medical device manufacturers. Certain EU member states also mandate implementation of commercial compliance programs.
In the EU, regulatory authorities have the power to carry out announced and, if necessary, unannounced inspections of companies, as well as of suppliers and/or sub-contractors and, where necessary, the facilities of professional users. Failure to comply with the applicable regulatory requirements could require time and resources to respond to the regulatory authorities’ observations and to implement corrective and preventive actions, as appropriate. Regulatory authorities have broad compliance and enforcement powers and, if such issues cannot be resolved to their satisfaction, can take a variety of actions, including untitled or warning letters, fines, consent decrees, injunctions, or civil or criminal penalties.
The aforementioned EU rules are generally applicable in the European Economic Area (“EEA”), which consists of the twenty-seven EU member states, as well as Iceland, Liechtenstein and Norway.
Other countries
Regulations in other countries, including the requirements for approvals, certification or clearance and the time required for regulatory review, vary from country to country. Certain countries, such as South Korea, Brazil, Australia and Canada, have their own regulatory agencies. These countries typically require regulatory approvals and compliance with extensive safety and quality system regulations included in the Medical Device Single Audit Program that we will be required to comply with on an ongoing basis. Failure to obtain regulatory approval in any foreign country in which we plan to market our products or failure to comply with any regulation in any foreign country in which we market our products may negatively impact on our ability to generate revenue and harm our business.
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In addition, local regulations may apply, which govern the use of our products, and which could have an adverse effect on our product utilization if they are unfavorable. All such regulations are revised from time to time and, in general, are increasing in complexity and in the scope and degree of documentation and testing required. There can be no assurance that the outcomes from such documentation and testing will be acceptable to any particular regulatory agency or will continue to be acceptable over time. There are further regulations governing the importation, marketing, sale, distribution, use, and service as well as the removal and disposal of medical devices in the regions in which we operate and market our products. Failure to comply with any of these regulations could result in sanctions or fines and could prevent us from marketing our products in these regions.
Our ISO 13485 (quality management system) approval, CDSCO approval for the manufacture, sale and distribution of our products and our Indian export license allows us to market our products in fifty (50) non-FDA and non-CE (EU) countries without further regulatory approvals and in an additional seventy-nine (79) countries require only minimal registration. We have received regulatory approval to market and sell our products in the United Arab Emirates, Nepal, Indonesia, Guatemala Philippines, Ukraine and Sri Lanka and have initiated the regulatory approval process, in many other countries, which if successful, will allow us to market our products in more than fifty (50) countries within approximately one year. However, there can be no assurance as to when we will secure any such regulatory approvals, if at all.
Data Privacy and Security Laws
Numerous state, federal, and foreign laws, regulations, and standards govern the collection, use, access to, confidentiality, and security of health-related and other personal information and could apply now or in the future to our operations or the operations of our partners. In the U.S., numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws and consumer protection laws and regulations govern the collection, use, disclosure, and protection of health-related and other personal information. In addition, certain foreign laws govern the privacy and security of personal data, including health-related data. Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.
We collect, process, share, disclose, transfer, and otherwise use data, some of which contains personal information about identifiable individuals including, but not limited to, our employees, clinical trial participants, partners, and vendors. Therefore, if we commence marketing our products in the U.S., the EU and other countries, we will be subject to U.S. (federal, state and local) and international laws and regulations, including those in the EEA regarding data privacy and security and our use of such data.
If we market our products in the EU, we will be subject to the European Union General Data Protection Regulation 2016/679 and applicable national supplementing laws (collectively, the “GDPR”). The GDPR imposes comprehensive data privacy compliance obligations in relation to our collection, processing, sharing, disclosure, transfer and other use of data relating to an identifiable living individual or “personal data,” including a principle of accountability and the obligation to demonstrate compliance through policies, procedures, training, and audits.
The GDPR also regulates cross-border transfers of personal data out of the EEA. Recent legal developments in Europe have created complexity and uncertainty regarding such transfers, in particular in relation to transfers to the United States.
Cybersecurity
In the normal course of business, we may collect and store personal information and other sensitive information, including proprietary and confidential business information, trade secrets, intellectual property, patient information, sensitive third-party information and employee information. To protect this information, our existing cybersecurity policies require continuous monitoring and detection programs, network security precautions, encryption of critical data and in-depth security assessments of vendors. We maintain various protections designed to safeguard against cyberattacks, including firewalls and virus detection software. We have established and regularly test our disaster recovery plan, and we protect against business interruption by backing up our major systems. In addition, we periodically scan our environment for any vulnerabilities, perform penetration testing and engage third parties to assess the effectiveness of our data security practices.
Employees
As of the date of this Annual Report, we had 378 employees, 175 of whom were engaged in manufacturing, 76 in marketing, sales, clinical support and field service, 61 in research and development, 26 in sourcing, 5 in quality control and 35 in administration. Most of our employees are based at our facility in Gurgaon, Delhi NCR, India. We generally consider our relationship with our employees to be good.
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Item 1A. Risk Factors.
As a “smaller reporting company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are not required to provide the information required by this Item.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 1C. Cybersecurity.
In the normal course of business, we may collect
and store personal information and other sensitive information, including proprietary and confidential business information, trade secrets,
intellectual property, patient information, sensitive
Our cybersecurity program is primarily overseen by our Head-Server and Network Administrator, who works closely with our information technology team and our senior management to develop and advance our cybersecurity strategy, as well as to respond to cybersecurity incidents. Our Head-Server and Network Administrator reports to our Chief Operating Officer on cybersecurity matters and collaborates with stakeholders to assess risks and implement strategies.
We have engaged a specialized consulting firm from India to enhance and develop the cybersecurity framework for our products with the aim of protecting sensitive patient data and proprietary device information from cyber threats and ensuring compliance with the latest cybersecurity standards including, HIPPA, FDA regulations, IEC 62443, and NIST guidelines for medical devices.
We have
Item 2. Properties.
We lease approximately 70,000 square feet in Gurugram, Delhi NCR, India, which serves as our headquarters as well as our manufacturing facility. The facility, spread over three floors, is leased pursuant to a nine-year lease expiring in March 2030 for the third floor, another nine-year lease expiring in May 2032 for the ground floor and another six-year lease expiring in July 2030 for the first floor. All the leases are further renewable under similar mutually agreed terms.
Item 3. 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.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is currently quoted on the OTC Pink tier of the over-the-counter market maintained by OTC Markets Group, Inc. under the symbol “SSII.” However, the trading market for our common stock is sporadic and extremely limited. Moreover, until the review of the Form 15c2-11 which has been filed with FINRA on our behalf is cleared by FINRA (as to which no assurance can be given), our common stock is not eligible for proprietary broker-dealer quotations on the over-the-counter market and may only be bought or sold in unsolicited customer orders. This further limits the trading market for our common stock. The Company has also applied to list its common stock on the Nasdaq Stock Market, LLC, although there is no assurance that such application will be approved or that in either case, a liquid trading market for the common stock will develop and be sustained.
Holders of our Common Stock
As of the date of this Annual Report, we had 193,559,340 shares of common stock issued and outstanding and 343 holders of record of our common stock. One of these holders is CEDE and Company, which is the mechanism used for brokerage firms to hold securities in book entry form on behalf of their clients and as of the date of this Annual Report, they held approximately 15,051,246 shares of common stock for these shareholders.
Dividends
The payment by us of dividends, if any, in the future rests within the discretion of our board of directors and will depend, among other things, upon our earnings, capital requirements and financial condition, as well as other relevant factors. We have not paid any dividends since our inception and we do not intend to pay any cash dividends in the foreseeable future, but intend to retain all earnings, if any, for use in our business.
Securities Authorized for Issuance under Equity Compensation Plans
| Plan category | Number of securities to be issued upon exercise of outstanding options, grants warrants and rights |
Weighted- average exercise price of outstanding options, grants warrants and rights |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|||||||||
| Equity compensation plans approved by security holders | 12,142,838 shares | (1) | $ | 3.863 | 7,213,096 shares | (1) | ||||||
| Equity compensation plans not approved by security holders | 0 shares | – | 0 shares | |||||||||
| Total | 12,142,838 | (1) | $ 0 | 7,213,096 | (1) | |||||||
| (1) | Represents shares of common stock under our 2016 Incentive Stock Plan (the “Incentive Plan”). As of the date of this Annual Report, 12,142,838 shares of common stock (comprised of 7,767,431 stock options and 4,375,407 stock grants) were issued under the Incentive Stock Plan. As of the date of this Annual Report, an additional 7,213,096 shares of common stock are available for future issuances under the Incentive Stock Plan. |
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Recent Sales of Unregistered Securities
In March 2024, the Company issued 15,000 shares of common stock to an investor relations firm for investor relations and digital marketing services.
In August 2024, the Company issued 125,000 shares to certain doctors/proctors for providing their proctoring/mentoring services.
In December 2024, the Company issued 9,034 shares of common stock to a marketing advisory services firm for providing dedicated support, production, graphics, post-production and distribution services.
All of the foregoing securities were issued in accordance with the exemption from registration afforded by Section 4(a)(2) of and/or Regulation D under the Securities Act, as amended, as the persons receiving such shares having provided the Company with appropriate representations as to their investment intent and their status as “accredited investors” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
Item 6. [Reserved]
Item 7. 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.
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During the year ended December 31, 2024, we sold 36 surgical robotic systems out of which 7 systems were sold on deferred payment basis. In addition, during the year ended December 31, 2024, we also installed 11 systems on a pay-per-use basis. The system installed at the Johns Hopkins Hospital in Baltimore Maryland for research and clinical training, having completed one year period post its import into USA, was returned back to India in compliance with the Indian government regulations for medical devices exported overseas for exhibition/clinical training/research purposes. During the year ended December 31, 2024, we also received back 3 systems which, as of December 31, 2023, were installed in 3 hospitals for evaluation purposes and as such we had no systems under evaluation at any of the hospitals as on December 31, 2024. At the end of December 2024, we had a total of 62 installed systems of which 47 were installed during the year ended December 31, 2024.
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 doubt about the Company’s ability to continue as a going concern.
The following table provides selected financial data about our Company at December 31, 2024, and December 31, 2023:
| Balance Sheet Data | As of | As of | ||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Cash | 466,500 | 2,022,276 | ||||||
| Restricted Cash** | 6,157,035 | 5,065,569 | ||||||
| Total Assets | 42,385,213 | 31,515,994 | ||||||
| Total Liabilities | 28,928,110 | 11,797,916 | ||||||
| Total Shareholders’ Equity | 13,457,103 | 19,718,078 | ||||||
| ** | Represents Fixed Deposits held by the 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 year ended | |||||||||||
| S. No. | Particulars | December 31, 2024 | December 31, 2023 | ||||||||
| 1 | Total Revenue | 20,649,528 | 5,875,314 | ||||||||
| 2 | Cost of revenue | (12,197,162 | ) | (5,149,786 | ) | ||||||
| 3 | Gross profit | 8,452,366 | 725,528 | ||||||||
| 4 | Research & development expense | 2,491,771 | 1,058,660 | ||||||||
| 5 | Stock compensation expense | 14,342,784 | 9,723,492 | ||||||||
| 6 | Depreciation and amortization expense | 436,005 | 152,738 | ||||||||
| 7 | Selling, general and administrative expense | 10,157,768 | 10,064,622 | ||||||||
| 8 | Loss from operations | (18,975,962 | ) | (20,273,984 | ) | ||||||
| 9 | Other income (expenses) | (175,235 | ) | (604,308 | ) | ||||||
| 10 | Income tax expense | - | - | ||||||||
| 11 | Net loss | (19,151,197 | ) | (20,878,292 | ) | ||||||
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Year ended December 31, 2024, as compared to year ended December 31, 2023
Revenues. During the year ended December 31, 2024, the Company had revenues of $20,649,528 (comprising $19,457,767 of system sales, $942,548 of instrument sales and $177,518 of warranty sales and $71,695 of Lease income), compared to revenues of $5,875,314 (comprising $5,225,777 of system sales, $647,766 of instrument sales and $1,771 of warranty sales) during the year ended December 31, 2023.The increase in revenue is primarily due to sale of increased number of surgical robotic systems and instruments in the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Research and Development Expenses. Research and Development expenses during the year ended December 31, 2024, were $2,491,771, as compared to $1,058,660 for the year ended December 31, 2023. The increase in the Research and Development expenses as compared to the previous year is in line with the Company’s continued focus on improving the design and technological capabilities of its existing SSi Mantra system and further expanding its product offerings.
Stock Compensation Expense. We had stock compensation expenses of $14,342,784 and $9,723,492 during the years ended December 31, 2024, and December 31, 2023 respectively. The substantial increase in the stock compensation expense in 2024 is primarily the result of the award of second tranche of stock grants to employees of the Company and its subsidiaries and the issuance of stock awards and stock options to executive officers of the Company and its subsidiaries in November 2024 under our Incentive Stock Plan, in recognition of their efforts in Company’s operational growth.
Depreciation and amortization expenses. We had depreciation and amortization expense of $436,005 for the year ended December 31,2024, as compared to $152,738 in the year ended December 31, 2023. The depreciation and amortization expenses primarily consist of depreciation on fixed assets only.
Selling, General and Administrative expenses. We incurred $10,157,768 in selling, general and administrative expenses during the year ended December 31, 2024, as compared to $10,064,622 for the year ended December 31, 2023.
Our Selling, General and Administrative expenses (“SG&A”) comprise of expenses 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 expenses 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 costs 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 expenses resulted from the increased manpower strength and an increased scale of commercial operations during 2024 as compared to the year ended December 31, 2023.
Other Income (Expenses). We have incurred $175,235 in interest expenses (net) during the year ended December 31, 2024, as compared to an interest expense (net) of $604,308 during the year ended December 31, 2023. The decrease in interest expense (net) from 2023 to 2024 is due to increase in interest income on fixed deposits with HDFC bank in India and interest income recognized during the year related to deferred payment sales.
Net Loss. We incurred a net loss of $19,151,197 for the year ended December 31, 2024, as compared to a net loss of $20,878,292 for the year ended December 31, 2023. The decrease in net loss from 2023 to 2024 is primarily due to increase in gross profit of $7,726,838, offset by increase in stock compensation expense and of $4,619,292 and decrease in interest expense (net) of $ 175,235 from $ 604,308 respectively.
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Liquidity and Capital Resources
The Company expects to require substantial funds for scaling up its operations, incurring capital expenditures to have its own manufacturing facility for in-house machining and tooling capacity and to continue to finance its research and development work in the field of surgical robotics.
As of December 31, 2024, the Company had shareholders’ equity of $13,457,103 and a working capital surplus of $6,086,069 as compared to shareholders’ equity of $19,718,078 and a working capital surplus of $12,954,939 as of December 31, 2023.
| For the year ended | ||||||||||
| S. No. | Particulars | December 31, 2024 | December 31, 2023 | |||||||
| Net cash provided by operating activities: | ||||||||||
| 1 | Net loss | (19,151,197 | ) | (20,878,292 | ) | |||||
| 2 | Non-cash adjustments | 16,435,264 | 15,699,110 | |||||||
| 3 | Change in operating assets and liabilities | (6,787,097 | ) | (10,182,463 | ) | |||||
| 4 | Net cash used in operating activities | (9,503,030 | ) | (15,361,645 | ) | |||||
| 5 | Net cash used in investing activities | (661,479 | ) | (453,327 | ) | |||||
| 6 | Net cash provided by financing activities | 9,425,980 | 22,796,286 | |||||||
| 7 | Net change in cash | (738,529 | ) | 6,981,314 | ||||||
| 8 | Effect of exchange rate on cash | 274,219 | (168,094 | ) | ||||||
| 9 | Cash at beginning of year | 7,087,845 | 274,625 | |||||||
| 10 | Cash at end of year | 6,623,535 | 7,087,845 | |||||||
Cash Flows Used in Operating Activities
Net cash used in operating activities was $9,503,030 for the year ending 31 December 2024, compared to $15,361,645 for the year ending 31 December 2023, reflecting lower cash losses and decrease in working capital needs due to increased scale of operations. The major drivers contributing to the decrease of $5,858,615 in net cash used in operating activities year-over-year included the following:
| ● | Decrease in net cash loss to the extent of $2,463,249 (net of non-cash adjustments) in fiscal year 2024 compared to fiscal year 2023. Non-cash adjustments included stock compensation expense, credit loss reserve, operating lease expense, interest expense and depreciation. |
| ● | Decrease of $3,395,366 in operating assets and liabilities comprising mainly of an increase of $4,305,512 in deferred revenue and of $713,744 in accrued expenses and other liabilities in fiscal year 2024 as compared to 2023 and a net decrease of $1,623,890 in other operating assets and liabilities other than deferred revenue, accrued expenses and other liabilities. |
| ● | Changes in accounts receivable contributed to lower cash flow of $1,818,392 for fiscal year 2024 as compared to fiscal year 2023. Although the Company’s revenue increased from system sales by $14,231,990, from instruments sales by $294,782, from warranty sales by $175,747 and from lease income by $71,695 in fiscal year 2024 compared to fiscal year 2023. |
| ● | Increased investment in inventory contributed to higher cash outflow of $7,691,518 for fiscal year 2024 compared to fiscal year 2023 due to revenue growth and expansion of business activities. |
Cash Flows from Investing Activities
During the year ended December 31, 2024, we had net cash used in investing activities of $661,479 resulting from purchases of property, plant and equipment.
During the year ended December 31, 2023, we had net cash used in investing activities of $453,327 resulting from purchase of property, plant and equipment.
Cash Flows from Financing Activities
During the year ended December 31, 2024, we had net cash, provided by financing activities of $9,425,980, which comprised of $1,975,980 in proceeds from our bank overdraft facility, $3,000,000 each in proceeds from issuance of convertible notes and promissory notes to our principal shareholder and $1,450,000 in proceeds from issuance of convertible notes to other investors.
During the year ended December 31, 2023, we had net cash, provided by financing activities of $22,796,286, which comprised of $2,480,735 in proceeds from our bank overdraft facility, $412,056 in proceeds from issuance of common stock against warrant and options, $16,980,000 in proceeds from issuance of convertible notes to our principal shareholder, $3,000,000 in proceeds from issuance of convertible notes to other investors and $50,000 in proceeds from the exercise of stock options. There was a decrease of $126,505 on account of repayment of term loans
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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 is no assurance that we will be able to secure additional funding. The accompanying 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 Estimates
Use of Estimates
The discussion and analysis of our financial condition and results of operations are based upon the consolidated financial statements included in this Annual Report on Form 10-K, 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 consolidated financial statements under Part II, Item 15, “Exhibits and Financial Statements Schedules.”
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.
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 December 31, 2024, the Company has issued two types of equity incentives:
Stock Options: These provide employees with the right, but not the obligation, to purchase shares of the Company’s stock at a specified price, within a defined period, as per the terms of the stock option agreement. Stock-based compensation expense associated with AVRA 2016 Stock Incentive Plan is measured at fair-value using a Black-Scholes option-pricing model at commencement of each offering period and recognized over that offering period.
Stock Units (Restricted Stock Units, or RSUs): These do not require the employee to exercise any options. Each stock unit automatically converts into a specified number of shares upon vesting. The Company uses last three months’ average share price of common stock on OTC exchange as grant date fair value for RSUs.
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.
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 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 8. Financial Statements and Supplementary Data.
See the Index to the Financial Statements beginning on page F-1 below.
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
(a) Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures and internal control over financial reporting, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2024.
To ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Based on the evaluation performed as of December 31, 2024, as a result of the material weaknesses in internal control over financial reporting that are described below in Management’s Report on Internal Control Over Financial Reporting, our Chief Executive Officer and Chief Financial Officer determined that our disclosure controls and procedures were not effective as of such date.
Internal Controls over Financial Reporting
Management’s Report on Internal Controls Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). A company’s internal control over financial reporting is a process designed by, or under the supervision of, its Chief Executive Officer and Chief Financial Officer, and effected by such company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
| ● | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
| ● | provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and |
| ● | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
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Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024, based on the framework set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2024 due to the material weaknesses described below.
| ● | We failed to design adequate controls and procedures to provide reasonable assurance that U.S. GAAP was being properly applied to the matters resulting into the restatement of our quarterly financial statements, including recognition of revenue in case of deferred payment sales, recognition of right of use of certain assets and lease liabilities and functional and other classifications, also leading to certain accounting errors as described in details in the restatement notes as included in the respective amended quarterly financial statements. |
| ● | We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. |
| ● | We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. |
Remediation Plan
The Company has been addressing and remediating these material weaknesses with the support and assistance of the accounting and financial staff employed by our Indian operating subsidiary. We have enhanced the review process for significant transactions to ensure proper accounting treatment under applicable guidelines and have engaged the external experts to provide guidance to the Company staff in the areas of financial reporting, internal controls, and enterprise risk management and assist it in the application of accounting principles to complex transactions. This external expert group is also helping the Company in strengthening its existing internal controls, policies and Standard Operating Procedures (“SOPs”) in all the major functional areas.
In addition, we have also engaged services of external experts in the field of designing, development and implementation of a comprehensive cloud-based ERP system. The ERP implementation process involves a detailed process study of each of the business functions and engagement with their respective process owners, identifying their linkages with other business functions and designing report formats, data sourcing and customizing the ERP system and training of the respective teams to meet the business data flow and reporting requirements of each business function. Post completion of roll out of all the functional modules under this new cloud-based ERP system which is designed to integrate all business functions within the accounting and financial department would help us in further addressing the abovementioned weaknesses.
Our Chief Executive Officer and Chief Financial Officer do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of any control system is subject to resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the fact that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
(b) Changes in Internal Controls Over Financial Reporting
Except for the remediation efforts described above, there were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by the Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Our directors and executive officers and their respective ages and titles are as follows:
| Name | Age | Position(s) and Office(s) Held | ||
| Sudhir Srivastava, MD | 77 | Chairman, Chief Executive Officer and Director | ||
| Anup Sethi | 60 | Chief Financial Officer | ||
| Vishwajyoti P. Srivastava, M.D | 48 | President, Chief Operating Officer – South Asia and Director | ||
| Barry F. Cohen | 85 | Chief Operating Officer – Americas and Director | ||
| Dr. Mylswamy Annadurai | 66 | Director | ||
| Dr. S.P. Somashekhar | 52 | Director | ||
| Dr. Frederic H Moll | 73 | Director | ||
| Tim Adams | 56 | Director |
Set forth below is a brief description of the background and business experience of our directors and executive officers.
Sudhir Srivastava, M.D., joined the Company on April 14, 2023, as its Chairman, Chief Executive Officer and a director upon completion of the CardioVentures Merger. Dr. Srivastava founded Sudhir Srivastava Innovations Pvt. Ltd. (“SSI-India”), our Indian operating subsidiary in 2019 and has served as its Chairman, Managing Director and Chief Executive Officer since that time. SSI-India was founded with the objective of launching the development of an advanced, affordable, and accessible surgical robotic system that would benefit greater numbers of patients around the world. Dr. Srivastava completed his medical degree in India in 1971 and moved to the United States in 1972, where he underwent a residency in general surgery in St. Louis and further completed his training, including in cardiothoracic surgery, at the University of British Columbia Hospitals in Vancouver, Canada. He is double board certified by the American Board of Surgery and Thoracic Surgery. Dr. Srivastava, after moving to Texas to begin his practice in 1981, became heavily involved in advancing minimally invasive cardiac surgical approaches and robotic cardiac surgery procedures during his time in Texas. While in Texas, in 2002 Dr. Srivastava was the founding chairman of Alliance Hospital, which became one of the busiest robotic cardiac centers globally. In 2007, Dr. Srivastava joined the University of Chicago faculty and served as the Director of Robotic Cardiac Surgery to launch their program. In 2009, Dr. Srivastava moved to Atlanta, Georgia, and founded the International College of Robotic Surgery and launched the Robotic Revascularization Program at St. Joseph’s Hospital. While in the United States, he performed over 1,400 robotic cardiothoracic procedures and trained over 350 surgical teams from around the world. His passion and experience took him to various countries around the world, where he helped launch robotic cardiac surgery programs. Dr. Srivastava returned to India in 2011 to establish robotic surgery programs throughout the country during a time when robotic surgery was still nascent in India. He founded the International Centre for Robotic Surgery in Delhi, India, and trained surgeons in different specialties, introducing them to high-level robotic cardiac surgery procedures. Recognizing the high cost and limited access to robotic surgery in India, in 2012, Dr. Srivastava undertook the mission of developing an affordable system that would be technologically advanced, so that greater numbers of patients could benefit from robotic cardiac surgery in India and worldwide. His efforts led to the development of the SSi Mantra Surgical Robotic System by the SSi Companies Group, which was commercially introduced in August 2022. Dr. Srivastava is globally recognized as a pioneer and leader in robotic cardiac surgery and has received numerous awards worldwide for advancing the field.
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Anup Kumar Sethi joined the Company on April 14, 2023, as its Chief Financial Officer, upon completion of the Cardio Ventures Merger. Mr. Sethi has served as Chief Financial Officer of SSI-India since January 2023 and has been associated with SSI-India since 2018 on a consulting basis as a financial advisor. For over ten years prior thereto, he held senior management positions in well-established healthcare companies in India, including Fortis and International Oncology. With close to thirty years of overall experience and having worked in India, China, South Africa, and Nigeria, in organizations of various sizes belonging to a diverse range of industries like automotive tires manufacturing, textiles, digital media and healthcare delivery, Mr. Sethi is very well adapted to building and working with multi-faceted, multi-cultural teams. Mr. Sethi has a FCMA qualification (Fellow Member of Institute of Cost Accountants of India), an Associate membership of CPA, Australia, and a Certified Financial Planner (CFP) certification from the Financial Planning Standards Board, with hands-on experience in leading teams in the functional areas of corporate finance, strategy, accounting, compliance and business development.
Vishwajyoti P. Srivastava, M.D., joined the Company on April 14, 2023, as its President, Chief Operating Officer – South Asia and a director upon completion of the CardioVentures Merger. Dr. Srivastava joined SSI-India as President and Chief Operating Officer for South Asia in November 2020. Prior to that, he served as President of OMNI 3DHD from January 2018 to November 2020, where he led the development of a secondary 3D Visualization System that was designed with the objective of giving 3D vision to the entire robotic surgical team. In 2015, Dr. Srivastava served as the COO of a Miami based health and wellness startup, Reshape Inc., that developed an online platform for healthy living initiatives. Dr. Srivastava was also instrumental in the creation of the International College of Robotic Surgery in Atlanta, Georgia, in 2009 as well as the International Centre for Robotic Surgery in New Delhi, India, in 2011. Dr. Srivastava has been deeply involved in the field of surgical robotics since 2008, covering the wide spectrum of clinical applications, teaching and training, tele-mentoring platforms, web-based surgeon didactic training modules, digital media and marketing. Dr. Srivastava graduated from Saint James School of Medicine in Anguilla, receiving his M.D. degree in August 2020. Dr. Srivastava also holds a B.A. in International Studies with a focus on South Asia from the University of Washington in Seattle that he received in 1999. Dr. Srivastava completed all his premedical requirements at Columbia University’s Post Baccalaureate Program in New York City, graduating in 2003. He is fluent in English, Hindi and French.
Barry F. Cohen co-founded the Company (then known as Avra Medical Robotics, Inc.) and served as its Chief Executive Officer and a director from February 4, 2015, until completion of CardioVentures Merger on April 14, 2023, when he assumed the position of Chief Operating Officer-Americas and continued as a director. Between 2006 and 2008, Mr. Cohen was a private investor and founded AVRA Surgical, Inc., a medical technology company. Prior to founding the Company, Mr. Cohen was a director of Dualis Med-Tech from 2012 to 2014 and was a director of AvraMiro GmbH from 2009 to 2014 and Avra Surgical Robotics, Inc. since 2011, which is currently inactive. From approximately 1979 to 1983 he served as director of Synalloy Corp., a manufacturer of pipe, piping systems and specialty chemicals after which he was appointed to serve as President from 1984 to 1985. Mr. Cohen also served as Chairman of the Executive Board of Wolverine Technologies, Inc., a NYSE listed company from 1979 to 1983 and President of Barry F. Cohen & Co., an NASD member from 1983 to 1999. Mr. Cohen has over fifty years’ experience in managing private and public industrial companies, and forty-seven years’ experience as a securities executive.
Dr. Mylswamy Annadurai joined the Company as a director on July 30, 2023. Dr. Annadurai is a distinguished space scientist of international repute, who has been involved in the Indian space program for over forty years, approximately thirty-six of which (1982-2018) were spent in various positions with the Indian Space Research Organization (“ISRO”), most recently as Director of the ISRO Satellite Center from April 2015 to July 2018. During that period, he was responsible for overseeing the development, manufacture and launch of twenty-nine satellites. Prior thereto, he also served as Program Director of Indian Remote Sensing and Small Satellite Program at ISRO from 2011-2015, where among other matters, he was responsible for overseeing ISRO’s Mars Orbiter Mission and as Project Director of India’s firs lunar mission, Chandarayaan-1, from 2004-2010. From August 2018 until March 2022, Dr. Annadurai served as Chairman of the National Design and Research Forum and from October 2018 to March 2023, he served as Vice President of the Tamil Nadu State Council for Science and Technology. Since May 2019. Dr. Annadurai has been serving as Chairman of the Aerospace Committee of the Southern India Chamber of Commerce and Industries in Chennai and since March 2021, as a director of Moon Land Technologies Pvt. Ltd. Since February 2023, he is also serving as a Trustee Member of the India Trustee Board of the America-India Foundation. Dr. Annadurai has received numerous awards from the Indian government, ISRO, international space organizations, academic institutions and professional bodies and societies. Dr. Annadurai holds B.E. (ECE), M.E. (Applied Electronics) and Ph.D. degrees from Anna University.
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Dr. S.P. Somashekhar joined the Company as a director on July 30, 2023. Dr. Somashekhar is a highly respected surgical oncologist and one of the first physicians to employ robotic surgery in India. Since January 2022, he has been affiliated with the Aster Group of Hospitals in India, where he serves as Global Director of the Aster International Institute of Oncology and Head of Department and Lead Consultant in Surgical and Gynecological Oncology and Robotic Surgery. He also serves as Chairman of the Medical Advisory Board for Aster DM Healthcare. For over twenty years prior to joining Aster, he was affiliated with Manipal Hospitals in Bengaluru, most recently as Head of Department of Surgical Oncology and Chairman of the Surgical Oncology Advisory Board. Dr. Somashekhar has served in a number of teaching positions, significant experience in conducting clinical studies, authored numerous medical papers and articles and received multiple awards in the medical field. He holds an M.B.B.S. degree from Mysuru University, an M.S. in General Surgery from the Sheth K.M. School of Postgraduate & Research in Ahmedabad, and an MCh in Oncosurgery from the Gujarat Cancer & Research Institute in Ahmedabad. He is also a Fellow of the Royal College of Surgeons (Edinburgh).
Dr. Frederic H Moll joined the Company as a Director on August 20, 2024. Dr. Moll is a renowned physician and visionary entrepreneur whose pioneering work in medical robotics has shaped the field of minimally invasive surgery. He did his B.A. from the University of California at Berkeley, an M.D. from the University of Washington, and an M.S. in Business Management from Stanford University. He is a pioneer in Medical Robotics, particularly in minimally invasive surgery. Dr. Moll co-founded Intuitive Surgical in 1995, where he co-developed the da Vinci robotic-assisted surgery system, a global standard for minimally invasive surgery. He also founded Hansen Medical and Auris Health, creating advanced robotic technologies for vascular procedures and lung cancer diagnosis, respectively. His innovations have shaped the field of surgery, and he has served on the Boards of influential Healthcare Tech companies like Mako Surgical and RefleXion.
Tim Adams joined the Company as a Director on August 20, 2024. Mr. Adams served as President and CEO of Ascension Saint Thomas Health and Ministry Market Executive for Ascension Tennessee from January 2018 until January 2023, leading a network of nine inpatient facilities across Middle Tennessee. Prior to this, he was the Texas Region Chief Executive Officer at Tenet Healthcare, overseeing 26 hospitals and leading operational efforts for one of the company's largest regions. Earlier in his career, Mr., Adams served as CEO of Cedar Park Regional Medical Center, a partner with Ascension's Seton Healthcare Family, and held executive roles at Community Health Systems and IASIS Healthcare, overseeing multi-hospital operations in Texas and Florida. Beyond his professional commitments, he is also an active member of the healthcare community, serving on numerous boards, including the Tennessee Hospital Association, Nashville Health Care Council, and the United Way of Greater Nashville. He holds a Bachelor of Business Administration from Baylor University and an MBA from The University of Texas at El Paso. In January 2023, Tim transitioned to the role of Regional Operating Officer and Senior Vice President for Ascension, overseeing Ascension ministries in 10 states, including Tennessee.
Terms of Office
Our directors are appointed for a one-year term to hold office until the next annual meeting of our stockholders and until a successor is appointed and qualified, or until their removal, resignation, or death. Executive officers serve at the pleasure of the board of directors.
Family Relationships
| ● | Dr. Sudhir Srivastava and Dr. Vishwajyoti P. Srivastava are father and son. |
There are no other familial relationships among our officers and directors.
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Board Committees and Independence
In an effort to improve our corporate governance, the company has constituted three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee.
Our board of directors has determined that Dr. Annadurai, Dr. Somashekhar, Dr. Moll and Mr. Adams are “Independent” within the meaning of the applicable rules and regulations of the SEC and the listing standards of the Nasdaq Stock Market. Each Committee consists of at least two Independent Directors. In addition, the board has determined that Mr. Adams is an “audit committee financial expert” as the term is defined by the applicable rules and regulations of the SEC and the Nasdaq Stock Market listing standards, based on his business and management experience
Members of the aforesaid Committee (s) are as follows:
| Name of the Committee | Members of the Committee |
| Audit Committee |
Dr. Frederic H Moll Mr. Tim Adams Dr. SP Somasekhar |
| Compensation Committee |
Dr. Frederic H Moll Mr. Tim Adams Mr. Barry F. Cohen |
| Nominating and Corporate Governance Committee |
Dr. Frederic H Moll Mr. Tim Adams |
Audit Committee
The audit committee assists our board of directors in its oversight of the Company’s accounting and financial reporting processes and the audits of the Company’s financial statements, including (a) the quality and integrity of the Company’s financial statements; (b) the Company’s compliance with legal and regulatory requirements; (c) the independent auditors’ qualifications and independence; and (d) the performance of our Company’s internal audit functions and independent auditors, as well as other matters which may come before it as directed by the board of directors. Further, the audit committee, to the extent it deems necessary or appropriate, among its several other responsibilities, shall:
| ● | be responsible for the appointment, compensation, retention, termination and oversight of the work of any independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company; |
| ● | discuss the annual audited financial statements and the quarterly unaudited financial statements with management and the independent auditors prior to their filing with the SEC in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q; |
| ● | review with the Company’s financial management on a periodic basis (a) issue regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles; and (b) the effect of any regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company; |
| ● | monitor the Company’s policies for compliance with federal, state, local and foreign laws and regulations and the Company’s policies on corporate conduct; |
| ● | maintain open, continuing, and direct communication between the board of directors, the audit committee and our independent auditors; and |
| ● | monitor our compliance with legal and regulatory requirements and shall have the authority to initiate any special investigations of conflicts of interest, and compliance with federal, state and local laws and regulations, including the Foreign Corrupt Practices Act, as may be warranted. |
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Compensation Committee
The compensation committee aids our board of directors in meeting its responsibilities relating to the compensation of the Company’s executive officers and to administer all incentive compensation plans and equity-based plans of the Company, including the plans under which Company securities may be acquired by directors, executive officers, employees and consultants. Further, the compensation committee, to the extent it deems necessary or appropriate, among its several other responsibilities, shall:
| ● | review periodically the Company’s philosophy regarding executive compensation to (a) ensure the attraction and retention of corporate officers, (b) ensure the motivation of corporate officers to achieve the Company’s business objectives, and (c) align the interests of key management with the long-term interests of our shareholders; |
| ● | review and approve corporate goals and objectives relating to Chief Executive Officer compensation and other executive officers of SSi and its subsidiary companies; |
| ● | make recommendations to the board of directors regarding compensation for non-employee directors, and review periodically non-employee director compensation in relation to other comparable companies and in light of such factors as the compensation committee may deem appropriate; and |
| ● | review periodically reports from management regarding funding the Company’s pension, retirement, long-term disability and other management welfare and benefit plans. |
Nominating and Corporate Governance Committee
The nominating and corporate governance committee shall recommend to the board of directors individuals qualified to serve as directors and on committees of the board of directors to advise the board of directors with respect to the board of directors composition, procedures and committees to develop and recommend to the board of directors a set of corporate governance principles applicable to the Company; and to oversee the evaluation of our board of directors and management.
Further, the nominating and corporate governance committee, to the extent it deems necessary or appropriate, among its several other responsibilities shall:
| ● | recommend to the board of directors and for approval by a majority of independent directors for election by shareholders or appointment by the board of directors as the case may be, pursuant to our bylaws and consistent with the board of directors’ criteria for selecting new directors; |
| ● | review the suitability for continued service as a director of each member of the board of directors when his or her term expires or when he or she has a significant change in status; |
| ● | review annually the composition of the board of directors and to review periodically the size of the board of directors; |
| ● | make recommendations on the frequency and structure of board of directors’ meetings or any other aspect of procedures of the board of directors; |
| ● | make recommendations regarding the chairmanship and composition of standing committees and monitor their functions; |
| ● | review annual committee assignments and chairmanships; |
| ● | recommend the establishment of special committees as may be necessary or desirable from time to time; and |
| ● | develop and review periodically corporate governance procedures and consider any other corporate governance issue. |
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% stockholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.
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Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that all filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with under Section 16 of the Exchange Act during the year ended December 31, 2024, and up through the date of this Annual Report, except for the following late filings resulting from administrative oversights:
| ● | A Form 4 reporting the acquisition of 50,000 shares of restricted common by stock by Dr. S.P. Somashekhar on August 31, 2024, pursuant to a grant under the Company’s Incentive Stock Plan, was filed on February 28, 2025. |
| ● | A Form 4 reporting disposition by gift of 17,500 shares of common stock by Dr. Sudhir Srivastava on September 6, 2024, was filed on September 12, 2024. |
| ● | A Form 4 reporting the acquisition by Dr. Sudhir Srivastava of a $2,000,000 principal amount 7% One-Year Convertible Promissory Note from the Company on December 12, 2024, was filed on January 23, 2025. |
| ● | A Form 4 reporting the acquisition by Dr. Sudhir Srivastava of a $5,000,000 principal amount 7% One-Year Convertible Promissory Note from the Company on January3, 2025, was filed on January 23, 2025. |
| ● | A Form 4 reporting the acquisition by Dr. Sudhir Srivastava of a $5,000,000 principal amount 7% One-Year Convertible Promissory Note from the Company on January 31, 2025, was filed on February 21, 2025. |
| ● | A Form 4 reporting the disposition by gift of 221,788 shares of common stock by Dr. Sudhir Srivastava on February 5, 2025, was filed on February 21, 2025. |
Rule 10b5-1 Trading Arrangements
During the year ended December 31, 2024, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).
Code of Ethics
We have adopted a Code of Ethics that applies to employees, including our principal executive officer, principal financial officer and/or people performing similar functions.
Board of Directors Role in Risk Oversight
Members of the board of directors have periodic meetings with management and the Company’s independent auditors to perform risk oversight with respect to the Company’s internal control processes. The Company believes that the board’s role in risk oversight does not materially affect the leadership structure of the Company.
Insider Trading Policies and Procedures
We have
Involvement in Certain Legal Proceedings
To the best of our knowledge, during the past ten years, none of our directors or executive officers were involved in any of the following: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
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Compensation Committee Interlocks and Insider Participation
None of our officers currently serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more officers serving on our Board of Directors.
Item 11. Executive Compensation.
Summary Compensation Table
The table below summarizes all compensation awarded to earned by or paid to our Chief Executive Officer and our other executive officers for the years ended December 31, 2024.
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards (#) | Option Awards (#) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||
| Sudhir Srivastava, M.D. Chairman and | 2024 | 600,000 | 0 | 0 | 5,886,997 | (2) | 13,307,213 | (2) | 0 | 0 | 289,567 | 14,196,780 | ||||||||||||||||||||||||||
| Chief Executive Officer(1) | ||||||||||||||||||||||||||||||||||||||
| Anup Kumar Sethi | 2024 | 177,385 | 0 | 845,592 | (4) | 0 | 0 | 0 | 0 | 866 | 178,251 | |||||||||||||||||||||||||||
| Chief Financial Officer(3) | ||||||||||||||||||||||||||||||||||||||
| Vishwajyoti P. Srivastava, M.D. | 2024 | 200,000 | 0 | 0 | 845,592 | (2) | 2,883,468 | (2) | 0 | 0 | 12,164 | 3,095,632 | ||||||||||||||||||||||||||
| President and Chief Operating Officer – South Asia(5) | ||||||||||||||||||||||||||||||||||||||
| Barry F. Cohen | 2024 | 180,000 | 0 | 0 | 845,592 | (2) | 2,883,468 | (2) | 0 | 0 | 0 | 3,063,468 | ||||||||||||||||||||||||||
| Chief Operating | (7) | |||||||||||||||||||||||||||||||||||||
| Officer-Americas(6) | ||||||||||||||||||||||||||||||||||||||
| (1) | Sudhir Srivastava became our Chairman and Chief Executive Officer on April 14, 2023, upon completion of the CardioVentures Merger. |
| (2) | Represents an option to purchase common stock granted under our Incentive Plan. The option vests in five equal annual installments commencing upon the date of grant and expires five years from the date of grant. |
| (3) | Mr. Sethi became our Chief Financial Officer on April 14, 2023, upon completion of the CardioVentures Merger. |
| (4) | Represents a grant of restricted shares of our common stock awarded under our Incentive Plan. The grant vests in five equal annual installments commencing upon the date of grant. |
| (5) | Dr. Vishwajyoti Srivastava became our President and Chief Operating Officer – South Asia on April 14, 2023, upon completion of the CardioVentures Merger. |
| (6) | Barry F. Cohen served as our Chairman and Chief Executive Officer from founding of the Company on February 4, 2015, until completion of the CardioVentures Merger on April 14, 2023, when he stepped down from those positions and assumed the position of Chief Operating Officer – Americas. |
| (7) | Represents a grant of restricted shares of our common stock awarded under our Incentive Plan, which vested in full on the date of grant. |
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Employment Agreements
The Company, through Otto Pvt. Ltd., an indirect, wholly owned subsidiary was party to employment agreements with each of Dr. Sudhir Srivastava, Anup Kumar Sethi and Dr. Vishwajyoti P. Srivastava. Dr. Sudhir Srivastava’s employment agreement with a base annual salary of $600,000 was with Otto Pvt Ltd. for a five-year period expiring in September 2026. Effective August 1, 2024, his employment agreement was moved to the Company on similar compensation terms now expiring in July 2027. Mr. Sethi’s employment agreement with an annual base salary of $175,000 was also with Otto Pvt Ltd. for a five-year (5-year) period expiring in January 2028. Effective August 1, 2024, his engagement contract was moved to the subsidiary company in India on the same terms of compensation (now payable in local currency) having a term of five years. Dr. Vishwajyoti P. Srivastava’s employment agreement with an annual base salary of $ 200,000 was also with Otto Pvt Ltd. and effective August 1, 2024, it was restructured as a consulting agreement with the Company with the same annual base compensation of $200,000 now expiring in July 2026. Each of the employment/consulting/engagement agreements contain customary confidentiality, assignment of proprietary rights, non-competition and non-solicitation provisions.
The Company is party to an employment agreement with Barry F. Cohen for a three-year (3-year) period expiring in April 2026, which provides for an annual base salary of $180,000. The employment agreement also provides for reimbursement of other reasonable business expenses incurred by Mr. Cohen in the performance of his duties and contains customary confidentiality, assignment of proprietary rights, non-competition and non-solicitation provisions.
Outstanding Equity Awards at Fiscal Year-End Table
The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each of our executive officers outstanding as of December 31, 2024.
| Number of Securities Underlying Unexercised Options Exercisable |
Number of Securities Underlying Unexercised Options Unexercisable |
Option Exercise Price |
Option Expiration Date |
Number of shares that have not vested |
Market value of shares of stock that have not vested** |
|||||||||||||||||
| Sudhir Srivastava, M.D. | 4,364,931 | 1,522,066 | $ | 5.00 | Nov 27, 2028 | |||||||||||||||||
| Anup Kumar Sethi | 507,355 | 3,937,076 | ||||||||||||||||||||
| Vishwajyoti P. Srivastava | 338,237 | 507,355 | $ | 5.00 | Nov 27, 2028 | |||||||||||||||||
| Barry F. Cohen | 338,237 | 507,355 | $ | 5.00 | Nov 27, 2028 | |||||||||||||||||
| * | The volume weighted average exercise price per share for all options awarded is $5.00. |
| ** | Based on market price of $7.76 per share on the grant date |
The above are options to purchase common stock granted under our Incentive Plan. The options vest in five equal annual instalments commencing upon the date of grant and expire five years from the date of grant.
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Compensation of Directors Table
The table below summarizes all compensation paid to our directors for the year ended December 31, 2024, our last completed fiscal year.
| DIRECTOR COMPENSATION | ||||||||||||||||||||||||||||||
| Name | Fees Earned or paid in Cash ($) | Stock Awards ($) | Option Awards (#) | Option Awards(2) ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||
| Sudhir Srivastava, M.D. | 600,000 | 5,886,997 | 13,307,213 | 0 | 0 | 289,567 | 14,196,780 | |||||||||||||||||||||||
| Vishwajyoti P. Srivastava, M.D. | 200,000 | 845,592 | 2,883,468 | 0 | 0 | 12,164 | 3,095,632 | |||||||||||||||||||||||
| Barry F. Cohen | 180,000 | 845,592 | 2,883,468 | 0 | 0 | 0 | 3,063,468 | |||||||||||||||||||||||
| Dr. Mylswamy Annadurai | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Dr. S.P. Somashekhar(1) | 0 | 16,000 | 0 | 0 | 0 | 0 | 0 | 16,000 | ||||||||||||||||||||||
| Tim Adams | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| Frederic H Moll | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
| (1) | Represents the value of a grant of 50,000 restricted shares of our common stock awarded under our Incentive Plan. The grant has fully vested as of December 31, 2024. |
| (2) | Represents the value of options to purchase common stock granted under our Incentive Plan. The option vests in five equal annual instalments commencing upon the date of grant and expires five years from the date of grant. |
Narrative Disclosure to the Director Compensation Table
The Company has not established a formal compensation arrangement for its non-employee directors but anticipates that they will initially be compensated with periodic grant of options under the 2016 Incentive Stock Plan, in the discretion of the board of directors. Non-employee directors are also reimbursed for travel and lodging expenses in connection with their attendance at in-person meetings of the board. When the Company is sufficiently capitalized, the Company may institute payment of cash directors’ fees to its non-employee directors in amounts to be determined at that time.
2016 Incentive Stock Plan
Our 2016 Incentive Stock Plan (the “Incentive Stock Plan”) provides for equity incentives to be granted to our employees, executive officers or directors or to key advisers or consultants. Equity incentives may be in the form of stock options with an exercise price not less than the fair market value of the underlying shares as determined pursuant to the 2016 Plan, restricted stock awards, other stock-based awards, or any combination of the foregoing. In the absence of a compensation committee, the 2016 Plan was administered by the board of directors. However, with the recent constitution of compensation committee, the Plan will henceforth be administered by the compensation committee, 3,000,000 shares of our common stock were originally reserved for issuance pursuant to the exercise of awards under the 2016 Plan. In August 2019, our board of directors and our majority shareholders approved an increase in the number of shares reserved under the 2016 Plan to 10,000,000 shares of our common stock. Our board of directors and majority shareholders in July 2022, approved a subsequent increase in the number of shares of our common stock reserved under the 2016 Plan to 20,000,000 shares of common stock. Our board of directors and majority shareholders in October 2023 mandated to keep 10% of our issued and outstanding common shares reserved under the 2016 Incentive Stock Plan. As of December 31, 2024, we have granted options to purchase 7,767,431 shares under the 2016 Plan, exercisable at $5.00 per share and 4,375,407 shares in stock grants.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth, as of the date of this Annual Report, the beneficial ownership of our common stock by (i) each director and executive officer; (ii) directors and executive officers as a group; (iii) each other five percent (5%) beneficial owner of our common stock.
The percentage ownership information shown in the table is based upon 193,559,340 shares of common stock outstanding as of the date of this Annual Report. Unless otherwise stated, the address of the persons set forth on the table is c/o the Company.
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Except as otherwise indicated, each person or entity named in the table has sole voting and investment power with respect to all shares of our capital shown as beneficially owned, subject to applicable community property laws. In accordance with SEC rules, shares of our common stock which may be acquired upon exercise of stock options which are currently exercisable or which become exercisable within sixty (60) days of the date of this Annual Report are deemed beneficially owned by the holders of such options and are deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person
| Names and addresses of beneficial owners | Number of shares of common stock | Percentage of class (%) | ||||||
| Directors and executive officers | ||||||||
| Sudhir Srivastava, M.D.(1) | 117,158,445 | 58.94 | % | |||||
| Anup Sethi(2) | 378,236 | * | ||||||
| Vishwajyoti P. Srivastava, M.D.(3) | 338,237 | * | ||||||
| Barry F. Cohen(4) | 8,501,954 | 4.28 | % | |||||
| Dr. Mylswamy Annadurai | 0 | * | ||||||
| Dr. S.P. Somashekhar(5) | 282,696 | * | ||||||
| Tim Adams | 5,031,902 | 2.53 | % | |||||
| Dr. Frederic H Moll | 20,335,045 | 10.23 | % | |||||
| All directors and executive officers as a group (eight persons)(6) | 152,026,515 | 76.48 | % | |||||
| 5% or greater shareholders | ||||||||
| Manipal Global Health Services | 14,949,070 | 7.52 | % | |||||
| 22, St. Georges Street, Port Louis 11302, Mauritius | ||||||||
Unless otherwise indicated, the address for all our directors and executive officers is, care of the Company, 404-405, 3rd Floor, iLabs Info Technology Centre, Udyog Vihar, Phase III, Gurugram, Haryana 122016, India.
| * | Less than 1%. |
| (1) | Includes (a) 112,761,514 shares held of record by Sushruta Pvt. Ltd. (“Sushruta”), a Bahamian holding company beneficially owned by Dr. Sudhir Srivastava; (b) 32,000 shares held by Dr Sudhir Srivastava; and (c) 4,364,931 shares issuable upon the exercise of vested stock options granted under our Incentive Plan. Sushruta also holds all 1,000 issued and outstanding Series A Preferred Shares, which entitles the holder to 51% of the total voting power of the Company. |
| (2) | Includes 338,237 vested stock awards granted under the Incentive Plan. |
| (3) | Represents 338,237 shares issuable upon the exercise of vested stock options granted under the Incentive Plan. |
| (4) | Includes 338,237 shares issuable upon the exercise of vested stock options granted under the Incentive Plan. |
| (5) | Includes a grant of 166,348 fully vested restricted shares of our common stock awarded under our Incentive Plan. |
| (6) | Includes the items in footnotes (1) – (5) above. |
| (7) | Dr. Ranjan R. Pai is the beneficial owner of the shares of common stock held of record by Manipal Global Health Services. |
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The people named above have full voting and investment power with respect to the shares indicated. Under the rules of the SEC, a person (or group of persons) is deemed to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security.
Securities Authorized for Issuance under Equity Compensation Plans
| Plan category | Number of securities to be issued upon exercise of outstanding options, grants warrants and rights |
Weighted- average exercise price of outstanding options, grants warrants and rights |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|||||||||
| Equity compensation plans approved by security holders | 12,142,838 shares | (1) | $ | 3.863 | 7,213,096 shares | (1) | ||||||
| Equity compensation plans not approved by security holders | 0 shares | -- | 0 shares | |||||||||
| Total | 12,142,838 | (1) | $ | 0 | 7,213,096 | (1) | ||||||
| (1) | Represents shares of common stock under our Incentive Stock Plan. As of the date of this Annual Report, 12,142,838 shares of common stock (comprised of 7,767,431 stock options and 4,375,407 stock grants) were issued under the Incentive Stock Plan. As of the date of this Annual Report an additional 7,213,096 shares of common stock are available for future issuances under the Incentive Stock Plan. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information to be filed pursuant to this Item 13 are appended to this Annual Report on Form 10-K filed herewith can be found at Part IV, Item 15, “Exhibits and Financial Statement Schedules.” under Note- 21.
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Item 14. Principal Accounting Fees and Services.
Fees billed by our independent registered public accounting firms, BDO India LLP (“BDO”) and BF Borgers CPA PC. for services provided for fiscal year 2024 and BF Borgers CPA PC. for fiscal year 2023 were as follows:
| Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||
| Audit Fees(1) | 686,326 | 112,500 | ||||||
| Audit-Related Fees | - | - | ||||||
| Tax Fees | - | - | ||||||
| All Other Fees | - | - | ||||||
| Total | 686,326 | 112,500 | ||||||
| (1) | Audit fees relate to professional services rendered in connection with the audit of the Company’s annual financial statements including expanded audit services related to the Company’s restatement, quarterly review of financial statements included in the Company’s Quarterly Report on Form 10-Q/A, and audit services provided in connection with other statutory and regulatory filings or engagements. Audit fees include $82,500 relating to filing of “Registration Statement” in Form-S1 of our former auditor BF Borgers CPA PC. (“Borgers”). |
Audit Fees
This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.
Audit-Related Fees
This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the SEC and other accounting consulting.
Tax Fees
This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.
All Other Fees
This category consists of fees for other miscellaneous items.
Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of the Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting. Any services and fees of BDO are also approved pursuant to the pre-approval policy of the Company.
Pre-Approval Policy
We have recently constituted our audit committee. Provision of the above-mentioned services was approved by our board of directors in the absence of an audit committee at that point in time.
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PART IV
Item 15. Exhibits and Financial Statement Schedules.
| (a) | The following documents are filed as part of this Report: |
| (1) | Financial Statements. The following financial statements and the report of our independent registered public accounting firm are filed as “Item 8. Financial Statements and Supplementary Data” of this Annual Report: |
| (2) | Financial Statement Schedules. |
Financial Statement Schedules are omitted because the information required is not applicable or the required information is shown in the financial statements or notes thereto.
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| (3) | Exhibits. |
| (1) | Filed as an exhibit to the Company’s Registration Statement on Form S-1 (File No. 333-216054) and incorporated herein by reference. |
| (2) | Filed as an exhibit to the Company’s Current Report on Form 8-K filed on April 19, 2023 and incorporated herein by reference. |
| (3) | Filed as an exhibit to the Company’s Current Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 filed on August 8, 2023 and incorporated herein by reference. |
| (4) | Filed herewith |
| + | Indicates management contract or compensatory plan or arrangement. |
Item 16. Form 10-K Summary.
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SS INNOVATIONS INTERNATIONAL, INC. | ||
| Dated: April 15, 2025 | By: | /s/ Sudhir Srivastava |
| Sudhir Srivastava, M.D., Chairman, Chief Executive Officer and Director | ||
| (Principal Executive Officer) | ||
| Dated: April 15, 2025 | By: | /s/ Anup Sethi |
| Anup Sethi, Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
| Dated: April 15, 2025 | By: | /s/ Sudhir Srivastava |
| Sudhir Srivastava, M.D., Chairman, Chief Executive Officer and Director | ||
| (Principal Executive Officer) |
| Dated: April 15, 2025 | By: | /s/ Anup Sethi |
| Anup Sethi, Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) |
| Dated: April 15, 2025 | By: | /s/ Vishwajyoti P. Srivastava |
| Vishwajyoti P. Srivastava, M.D., President, Chief Operating Officer – South Asia and Director |
| Dated: April 15, 2025 | By: | /s/ Barry F. Cohen |
| Barry F. Cohen, Chief Operating Officer – Americas and Director |
| Dated: April 15, 2025 | By: | /s/ Mylswamy Annadurai |
| Dr. Mylswamy Annadurai, Director | ||
| Dated: April 15, 2025 | By: | /s/ S.P. Somashekhar |
| Dr. S.P. Somashekhar, Director | ||
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
SS Innovations International Inc.
405, 3rd Floor, iLabs Info Technology Centre
Udyog Vihar, Phase III
Gurugram, Haryana 122016, India
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of SS Innovations International Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, consolidated statements of changes in equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has negative cash flows from operating activities during the year ended December 31, 2024. The Company is dependent on further funding to meet its obligations to sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 to the consolidated financial statements. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
F-2
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Determination of Standalone Selling Price
As described in Note 2 to the consolidated financial statements, during the year ended December 31, 2024, the Company recognized revenue for system sale arrangements of approximately $19.46 million. The Company’s system sale arrangements could include a combination of the following performance obligations: system(s); system accessories or instruments and extended warranty. For multiple-element arrangements, revenue is allocated to each distinct performance obligation based on its relative standalone selling price (“SSP”). SSP are based on observable prices at which the Company separately sells the products or services. If a SSP is not directly observable, then management estimates the SSP considering market conditions and entity-specific factors including historical pricing data, features and functionality of the products and services and industry data.
We identified the determination of the SSP of distinct performance obligations as a critical audit matter. The determination of SSP requires management’s significant judgments and assumptions. Auditing management’s significant judgments and assumptions involved especially challenging and subjective auditor judgment due to the nature and extent of audit effort required to address these matters.
The primary procedures we performed to address this critical audit matter included:
| ● | Assessing the appropriateness of management’s process and methodology for determining the SSP against relevant accounting literature. |
| ● | Testing the reasonableness of management’s significant assumptions and judgments used in determining the SSP through: (i) assessing a sample of revenue contracts and identifying distinct performance obligations, (ii) evaluating the consistency of assumptions used against internal and external market data and competitor margin data, and (iii) testing the completeness and accuracy of the data used in developing the SSP assumptions. |
(Signed
We have served as the Company's auditor since 2024.
April 15, 2025
F-3
SS INNOVATIONS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
| As of | ||||||||||
| Notes | December 31, 2024 | December 31, 2023 | ||||||||
| ASSETS | ||||||||||
| Current Assets: | ||||||||||
| Cash and cash equivalents | 7 | $ | $ | |||||||
| Restricted cash | 7 | |||||||||
| Accounts receivable, net | 6 | |||||||||
| Inventory, net | 15 | |||||||||
| Prepaids and other current assets | 8 | |||||||||
| Total Current Assets | ||||||||||
| Non- Current Assets: | ||||||||||
| Property, plant, and equipment, net | 4 | |||||||||
| Right of use asset | 16 | |||||||||
| Accounts receivable, net | 6 | |||||||||
| Restricted cash | 7 | |||||||||
| Prepaids and other non-current assets | 8 | |||||||||
| Total Non-Current Assets | ||||||||||
| Total Assets | $ | $ | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current Liabilities | ||||||||||
| Bank overdraft facility | 11 | $ | $ | |||||||
| Notes payable | 10 | |||||||||
| Current maturities of long-term debt | 12 | |||||||||
| Current portion of operating lease liabilities | 16 | |||||||||
| Accounts payable | 9 | |||||||||
| Deferred revenue | 13 | |||||||||
| Accrued expenses & other current liabilities | 9 | |||||||||
| Total Current Liabilities | ||||||||||
| Non- Current Liabilities | ||||||||||
| Operating lease liabilities, less current portion | 16 | |||||||||
| Deferred Revenue- non-current | 13 | |||||||||
| Other non-current liabilities | 9 | |||||||||
| Total Non-Current Liabilities | ||||||||||
| Total Liabilities | ||||||||||
| Stockholders’ equity: | ||||||||||
| Preferred stock, authorized | 14 | |||||||||
| Common stock, | 14 | |||||||||
| Accumulated other comprehensive income (loss) | 14 | ( | ) | ( | ) | |||||
| Common stock to be issued, | 14 | |||||||||
| Additional paid in capital | 14 | |||||||||
| Capital reserve | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Total stockholders’ equity | ||||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
SS INNOVATIONS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| For The Year Ended | ||||||||||
| Notes | December 31, 2024 | December 31, 2023 | ||||||||
| REVENUES | ||||||||||
| System sales | 13 | |||||||||
| Instruments sale | 13 | |||||||||
| Warranty sale | 13 | |||||||||
| Lease income | 13 | |||||||||
| Total revenue | $ | $ | ||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||
| GROSS PROFIT | ||||||||||
| OPERATING EXPENSES: | ||||||||||
| Research & development expense | ||||||||||
| Stock compensation expense | 20 | |||||||||
| Depreciation and amortization expense | 4 | |||||||||
| Selling, general and administrative expense | ||||||||||
| TOTAL OPERATING EXPENSES | ||||||||||
| Loss from operations | ( | ) | ( | ) | ||||||
| OTHER INCOME (EXPENSE): | ||||||||||
| Interest expense | ( | ) | ( | ) | ||||||
| Interest and other income, net | ||||||||||
| TOTAL OTHER EXPENSE, NET | ( | ) | ( | ) | ||||||
| LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ||||||
| Income tax expense | 17 | |||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share - basic and diluted | 2(r) | $ | ( | ) | $ | ( | ) | |||
| Weighted average- basic shares | 2(r) | |||||||||
| Weighted average- diluted shares | 2(r) | |||||||||
| CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS | ||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||||
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||
| Foreign currency translation loss | ( | ) | ( | ) | ||||||
| Retirement Benefit (net of tax) | 18 | ( | ) | ( | ) | |||||
| TOTAL COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
SS INNOVATIONS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
| Preferred Stock | Common Stock | Common Stock to be Issued | Additional Paid-In | Accumulated | Capital | Accumulated
other comprehensive | Total Stockholders' | |||||||||||||||||||||||||||||||||||||||
| Notes | Number | Amount | Number | Amount | Number | Amount | Capital | Deficit | Reserve | income (loss) | equity | |||||||||||||||||||||||||||||||||||
| Balance as at December 31, 2022 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Preferred stock issued | 14 | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Reverse recapitalization | 5 | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Conversion of notes payable to equity | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued for services | 20 | |||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued against exercise of warrants | 14 | |||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued against exercise of options | 14 | |||||||||||||||||||||||||||||||||||||||||||||
| Stock grants | ||||||||||||||||||||||||||||||||||||||||||||||
| Share cancellation | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Stock compensation | 20 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance as at December 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Stock compensation | 20 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued against exercise of warrants | 14 | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Stock issued for services | 20 | |||||||||||||||||||||||||||||||||||||||||||||
| Stock grants | 20 | |||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Balance as at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
SS INNOVATIONS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Year ended | ||||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Operating lease expense | ||||||||
| Interest Expense | ||||||||
| Interest and other income, net | ( | ) | ( | ) | ||||
| Property, plant and equipment written off | ||||||||
| Credit loss reserve | ||||||||
| Shares issued to investors and advisors | ||||||||
| Stock compensation expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ( | ) | ( | ) | ||||
| Inventory, net | ( | ) | ( | ) | ||||
| Deferred revenue | ||||||||
| Prepaids and other assets | ( | ) | ( | ) | ||||
| Accounts payable | ||||||||
| Accrued expenses & other liabilities | ||||||||
| Operating lease payment | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock against warrants and options | ||||||||
| Proceeds from issuance of promissory notes to principal shareholder | ||||||||
| Proceeds from issuance of convertible notes to principal shareholder | ||||||||
| Proceeds from issuance of convertible notes to other investors | ||||||||
| Proceeds from bank overdraft facility (net) | ||||||||
| Repayment of term loan | ( | ) | ||||||
| Proceeds from warrant exercised pending allotment | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ( | ) | ||||||
| Effect of exchange rate on cash | ( | ) | ||||||
| Cash and cash equivalents at the beginning of the year^ | ||||||||
| Cash and cash equivalents at end of the year | $ | $ | ||||||
| ^ For cash and cash equivalents and restricted cash, refer Note 7 | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Conversion of convertible notes into common stock | $ | |||||||
| Transfer of systems from inventory to property, plant and equipment | $ | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-7
SS INNOVATIONS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – FINANCIAL STATEMENTS
Organization
SS Innovations International, Inc. (the “Company”
or “SSII”) was incorporated as AVRA Surgical Microsystems, Inc. in the State of Florida on
On April 14, 2023, a wholly owned subsidiary of the Company merged with CardioVentures, Inc., a Delaware corporation (“CardioVentures”), the indirect parent of Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company engaged in the business of developing innovative surgical robotic technologies. As a result of the transaction, a “change in control” of the Company took place. In addition, among other matters, the Company changed its name to “SS Innovations International, Inc.” and implemented a reverse stock split. The financial statements, financial information, share and per share information contained in this report reflect the operations of both the Company and CardioVentures and give pro forma effect to the reverse stock split.
The Transaction (Note 5) was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method, AVRA was treated as the “acquired” company (“Accounting Acquiree”) and Cardio Ventures Inc., (the accounting acquirer), was assumed to have issued stock for the net assets of AVRA, accompanied by a recapitalization. Accordingly, for the year ended December 31, 2022, CardioVentures has been considered the ultimate holding company.
Basis of Presentation
The consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”). The accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of SS Innovations International, Inc. and all of its subsidiaries (“Group”).
The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis. Intra-group balances and transactions, and gains and losses arising from intra-group transactions, are eliminated while preparing consolidated financial statements.
Accounting policies of the respective individual subsidiaries are aligned wherever necessary, so as to ensure consistency with the accounting policies that are adopted by the Company under U.S. GAAP.
Principles of Consolidation
The consolidated financial statements include our accounts and all majority-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The Company follows a monthly reporting calendar, with its fiscal year ending on December 31.
Reclassifications
Certain prior period amounts in the consolidated statements of operations and consolidated balance sheets have been reclassified to conform with the current period presentation.
F-8
Concentrations of Business and Credit Risk
We maintain certain cash balances in excess of limits insured by Federal Deposit Insurance Corporation for US and Deposit Insurance and Credit Guarantee Corporation for India. We periodically evaluate the credit worthiness of the financial institutions with which we maintain cash deposits. We have not experienced any losses in such accounts and do not believe that there is any material credit risk to our cash. Concentration of credit risk with respect to accounts receivable is limited due to the wide variety of customers to whom our products are sold. Receivables from individual customers exceeding 10% of our total receivables as of December 31, 2024, and 2023 are disclosed separately in Note-6.
Going Concern
The accompanying consolidated financial statements
have been prepared on a going concern basis which implies the Company will continue to meet its obligations for the next 12 months as
of the date these consolidated financial statements are issued. The Company has a working capital surplus of $
Management recognizes that the Company must obtain
additional resources to successfully implement its business plans. The Company has been able to augment its financial resources to further
supplement its operations. Subsequent to year end, the Company has issued the convertible notes of $
However, the Company’s existing cash resources and income from operations, are not expected to provide sufficient funds to carry out the Company’s operations and business development through the next twelve (12) months. The management of the Company is making efforts to raise further funding to scale up operations and meet its longer-term capital needs. While management of the Company believes that it will be successful in its capital formation and planned expansion of its operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in generating additional revenues and ultimately achieving profitability. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
MERGER ACCOUNTING
On April 14, 2023, a wholly owned subsidiary of the Company merged with CardioVentures, Inc., a Delaware corporation, the indirect parent of Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company. As a result of the transaction, a “change in control” of the Company took place. In addition, among other matters, the Company changed its name to “SS Innovations International, Inc.” and implemented a one for ten reverse stock split. The consolidated financial statements, financial information and share and per share information contained in this report reflect the operations of both the Company and CardioVentures and give pro forma effect to the reverse stock split.
The CardioVentures Merger was accounted for as a reverse-merger, and recapitalization in accordance with generally accepted accounting principles (“GAAP”). For financial reporting purposes, SS Innovations International Inc. was the acquirer and AVRA was the acquired company. Consequently, the assets and liabilities and operations reflected in the historical financial statements prior to the CardioVentures Merger are consolidated assets and liabilities of AVRA and SS Innovations International Inc. and have been recorded at historical cost basis. The financial statements after completion of the CardioVentures Merger include the assets and liabilities of AVRA and SS Innovations International Inc.
F-9
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
| (a) | Use of Estimates |
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management. Significant estimates include fair value of stock options and standalone selling price in case of bundled revenue contracts.
| (b) | Cash and Cash Equivalents |
The Company considers all highly liquid investments purchased with original maturity of ninety days or less to be cash equivalents.
| (c) | Restricted Cash |
Restricted cash includes any cash and cash equivalents that are legally restricted as to withdrawal or usage for the Company’s operations. For the purposes of the consolidated statement of cash flows, the Company includes in its cash and cash-equivalent balances those amounts that have been classified as restricted cash and restricted cash equivalents
| (d) | Accounts Receivable and Allowance for Expected Credit Loss |
The Company’s account receivables are due from customers relating
to contracts to supply surgical robotic systems, instruments, and accessories and to provide post sales warranty/maintenance services.
The Company also sells surgical robotic systems under deferred payment arrangements and in such cases, the amounts due and recoverable
beyond the one year period at the balance sheet date are classified as long-term receivables. Collateral is currently not required. The
Company also maintains allowances for credit losses for estimated losses resulting from the inability of the Company’s customers
to make payments. The Company periodically reviews these estimated allowances, including an analysis of the customers’ payment history
and creditworthiness, the age of the trade receivable balances and current economic conditions that may affect a customer’s ability
to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically
reserves for those accounts deemed uncollectible or likely to become uncollectible. When receivables are determined to be uncollectible,
principal amounts of such receivables outstanding are deducted from the allowance. The allowance for credit losses as of December 31,
2024, and December 31, 2023, amounted to $
| (e) | Employee Benefits |
Contributions to defined contribution plans are charged to the Consolidated Statements of operations and comprehensive loss in the period in which services are rendered by the covered employees. Current service costs for defined benefit plans are recognized in the period to which they relate. The liability in respect of defined benefit plans is calculated annually by the Company using the projected unit credit method. The Company records annual amounts relating to its defined benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, future compensation increases and attrition rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in other comprehensive income (loss) (“OCI”) and amortized to net periodic benefit cost over the expected remaining period of service of the covered employees using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. These assumptions may not be within the control of the Company and accordingly it is reasonably possible that these assumptions could change in future periods. The Company includes the service cost component of the net periodic benefit cost in the same line item or items as other compensation costs arising from services rendered by the respective employees during the period. The interest cost, expected return on plan assets and amortization of actuarial gains/loss, are included in “Other income/(expense), net.” Refer to Note 18 - Employee Benefit Plans to the consolidated financial statements for details.
F-10
| (f) | Foreign Currency Translation |
The Company’s reporting currency is U.S.
dollars. The functional currency of the Company is the U.S. dollar. The functional currency of the Company’s subsidiary in India
is Indian National Rupee (“INR”). Transactions denominated in INR are translated to U.S. dollars at rates which approximate
those in effect on the transaction dates. Monetary assets and all liabilities denominated in foreign currencies on December 31, 2024 and
December 31, 2023 are translated at the exchange rate in effect as of those dates. Non-monetary assets and stockholders’ equity
are translated at the appropriate historical rates. Included in selling, general and administrative expense were foreign exchange loss
resulting from such translations of approximately $
The functional currency of each entity in the group is the currency of the primary economic environment in which it operates. Transactions in foreign currencies are initially recorded into functional currency at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured into functional currency at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are remeasured to the functional currency at exchange rates that prevailed on the date of inception of the transaction. All foreign exchange gains and losses arising on re-measurement are recorded in the Company’s Consolidated Statements of operations and comprehensive loss.
The assets and liabilities of the subsidiaries for which the functional currency is other than the U.S. dollar are translated into U.S. dollars, the reporting currency, at the rate of exchange prevailing on the balance sheet date. Revenues and expenses are translated into U.S. dollars at the exchange rates prevailing on the last business day of each month, which approximates the average monthly exchange rate. Share capital and other equity items are translated at exchange rates that prevailed on the date of inception of the transaction. Resulting translation adjustments are included in “Accumulated other comprehensive loss” in the consolidated balance sheets.
The relevant translation rates are as follows:
for the year ended December 31, 2024, closing rate at
The relevant translation rates are as follows:
for the year ended December 31, 2023, closing rate at
| (g) | Inventory |
The Company’s inventory consists of finished goods in the form of fully assembled and tested surgical robotic systems, semi-finished goods in the form of various sub-systems of the surgical robotic systems in various stages of assembly and manufacturing and raw material in the form of various mechanical, electrical, and other material components, parts, motors, encoders etc. which are not yet assembled/manufactured. The inventory is valued at the lower of cost (first-in, first-out) or estimated net realizable value.
| (h) | Cost of Sales |
Cost of sales primarily consists of manufacturing cost incurred for production of the Mantra System and the related instruments and accessories which are used to facilitate the use of the Mantra System. Further, Cost of sales also includes other costs such as salaries and rent which are directly attributable to the manufacturing process.
| (i) | Selling and Administrative Expenses |
Selling and administrative expenses primarily consist of indirect expenses which are not directly attributable to any other identified expense category of the Company.
F-11
| (j) | Fair value measurements |
ASC Topic 820, Fair Value Measurements and Disclosures defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability as against assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company’s own credit risk. The fair value hierarchy consists of the following three levels:
| ● | Level I — Quoted prices for identical instruments in active markets. |
| ● | Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
| ● | Level III — Instruments whose significant value drivers are unobservable. |
| (k) | Concentration of Credit Risk |
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, time deposits and accounts receivable. By their nature, all such financial instruments involve risks including the credit risks of non-performance by counterparties. The surplus funds are maintained as cash and cash equivalents and time deposits, placed with highly rated financial institutions to reduce its exposure to market risk with regard to these funds. The Company’s exposure to credit risk on account receivable is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. To mitigate this risk the Company evaluates the creditworthiness of its customers in conjunction with its revenue recognition processes as well as through its ongoing collectability assessment processes for accounts receivable. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
| (l) | Commitments and Contingencies |
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recognized when it is probable that a liability has been incurred, and the amount of the assessment and/or remediation can be reasonably estimated. A disclosure for a contingent liability is made when there is a possible obligation that may require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of an outflow of resources is remote, no provision or disclosure is made. Legal costs incurred in connection with such liabilities are expensed as they are incurred. Capital commitments are disclosed in the consolidated financial statements.
| (m) | Revenue Recognition |
The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized:
| ● | Identification of a contract with a customer or placement of a purchase order by the customer. |
| ● | Identification of the performance obligations in the contract or the purchase order as the case may be. |
| ● | Determination of the transaction price which is reflected in the purchase order placed by the customer. |
| ● | Allocation of the transaction price to the performance obligations in the contract; and |
| ● | Recognition of revenue when or as the performance obligations are satisfied as per the terms of the purchase order received from the customer. |
The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Product type and payment terms vary by client.
F-12
System Sales:
The Company recognizes revenue when the “transfer of control” occurs, which typically takes place upon the delivery of the system to the customer. In cases where a deferred payment arrangement exists, revenue is recognized at the present value of the consideration receivable, adjusted by the present value of any extended warranty obligations.
Standalone Selling Price:
Our system sale arrangements contain multiple products and services, including system, accessories, instruments and services. Other than services, we generally deliver all of the products upfront. Each of these products and services is a distinct performance obligation. System, instruments, accessories and services are also sold on a standalone basis. For multiple-element arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices at which we separately sell the products or services. If a standalone selling price is not directly observable, then we estimate the standalone selling prices considering market conditions and entity-specific factors including, but not limited to, historical pricing data, features and functionality of the products and services and industry benchmark. We regularly review standalone selling prices and maintain internal controls over establishing and updating these estimates. Revenue that is allocated to the service obligation is deferred and recognized ratably over the service period upon expiration of first year of service which is free and included in the system sale arrangements.
Key Terms of Customer Contracts
The Company enters into binding contracts with customers through either an agreement or a sales order, with all terms and conditions mutually agreed upon by both parties. The key terms and conditions include:
| 1. | Finalization of Product and Price: Agreement on the specific model of the “SSI Mantra” system and its selling price. |
| 2. | Payment Terms: Determination of payment terms, which may involve either a deferred payment arrangement or a one-time payment upon delivery and installation of the system at the customer’s premises. |
| 3. | Deferred Payment Model: For deferred payments, customers typically pay an advance amount before the dispatch of the system. The remaining balance is payable in yearly installments over a period of |
| 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 |
| 5. | Delivery, Installation, and Training: The Company is responsible for delivering and installing the system at the customer’s premises. Post-installation, the Company provides free training to surgeons and surgical staff to enable them to operate the system effectively. With respect to the sale of surgical robotic systems, training is provided at the time of delivery to the end customer, however the effort involved is considered negligible. |
| 6. | Transfer of Risk and Rewards: The risks and rewards associated with the system are transferred to the customer upon delivery to their premises. |
Instrument and accessories sales:
We also sell instruments for use by surgeons in conjunction with the use of our surgical robotic systems. These instruments are consumable items for our hospital customers, and we recognize the revenues from the sale of instruments as and when the instruments are dispatched to the customer.
Warranty and Annual Maintenance Contract Sales:
By application of ASC 606, a portion of the equipment sales value which is attributable towards the component of annual maintenance contracts is shown separately as Warranty sales. Once the assurance warranty or standard warranty periods are over, the actual maintenance contracts become effective and actual income from maintenance contracts is recognized as a distinct revenue stream.
Lease Income:
Under ASC 842, in cases where the systems are installed on a pay per procedure basis, the Company earns revenue which is a mix of fixed and variable components. Variable component consists of revenue share which is agreed based on the number and type of procedures performed by the customer, while the fixed component involves an agreed amount which the customer is obliged to pay over the lease term. Accordingly, the fixed component is recognized on a straight-line basis as lease income. Since the title to the system is not getting transferred to the counterparty, hence the cost relating to those systems is capitalized under property, plant and equipment and accordingly depreciation is charged over its period of useful life.
F-13
| (n) | Property Plant & Equipment |
Property and equipment are stated at cost, which is generally comprised of the purchase price for such property or equipment, non-refundable duties and taxes, Installation cost, freight, other associated costs, but excludes any discounts and/or rebates, less accumulated depreciation and impairment.
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.
Property Plant & Equipment depreciated
using the straight-line method at rates determined as per estimated useful lives of the assets.
| Years | ||
| Computer & peripherals | ||
| Furniture | ||
| Leasehold improvement | ||
| Office equipment | ||
| Plant and machinery | ||
| Research & Development equipment | ||
| Server & networking | ||
| Vehicles | ||
| Pay per use system | ||
| Demo system |
| (o) | Long-lived Assets |
In accordance with ASC 360, “Property Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset and current expectation that the asset will more than likely not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the discounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain circumstances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.
| (p) | Stock Compensation Expense |
Under the fair value recognition provisions of ASC Topic 718, Compensation-Stock Compensation, cost is measured at the grant date based on the fair value of the award and is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.
Determining the fair value of stock-based awards at the grant date requires significant judgment, including estimating the expected term over which the stock awards will be outstanding before they are exercised and the expected volatility of our stock.
F-14
As of December 31, 2024, the Company has issued two types of equity incentives:
Stock Options: These provide employees with the right, but not the obligation, to purchase shares of the Company’s stock at a specified price, within a defined period, as per the terms of the stock option agreement. Stock-based compensation expense associated with AVRA 2016 Stock Incentive Plan is measured at fair-value using a Black-Scholes option-pricing model at commencement of each offering period and recognized over that offering period.
Stock Units (Restricted Stock Units, or RSUs): These do not require the employee to exercise any options. Each stock unit automatically converts into a specified number of shares upon vesting. The Company uses last three months’ average share price of common stock on OTC exchange as grant date fair value for RSUs.
The Company recognizes stock-based compensation expense in the Consolidated Statements of operations and comprehensive loss for both employees and non-employee directors based on the grant-date fair value of the awards. These costs are recognized on a straight-line basis over the requisite service period, or until the date at which the recipient becomes eligible for retirement, if shorter. Forfeitures of equity awards are accounted for as they occur.
The Company accounts for equity instruments issued in exchange for goods or services from non-employees in accordance with ASC Topic 718 Stock Compensation. The costs associated with these equity instruments are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable.
| (q) | Income Taxes |
We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. The carrying amounts of deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency, and severity of current and cumulative losses, the duration of statutory carry forward periods, and tax planning alternatives. We use a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals and litigation processes, if any. The second step is to measure the largest amount of tax benefit as the largest amount that is more likely than not to be realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
Significant management judgment is required in determining provision for income taxes, deferred tax assets and liabilities, tax contingencies, unrecognized tax benefits, and any required valuation allowance, including taking into consideration the probability of the tax contingencies being incurred. Management assesses this probability based upon information provided by its tax advisers, its legal advisers and similar tax cases. If at a later time the assessment of the probability of these tax contingencies changes, accrual for such tax uncertainties may increase or decrease.
The Company has a valuation allowance due to management’s overall assessment of risks and uncertainties related to its future ability in the U.S. to realize and, hence, utilize certain deferred tax assets, primarily consisting of net operating losses (“NOLs”), carry forward temporary differences and future tax deductions.
The effective tax rate for annual and interim reporting periods could be impacted if uncertain tax positions that are not recognized are settled at an amount which differs from the Company’s estimate. Finally, if the Company is impacted by a change in the valuation allowance resulting from a change in judgment regarding the realizability of deferred tax assets, such effect will be recognized in the interim period in which the change occurs.
F-15
| (r) | Basic and Diluted Loss per Share |
The following table sets forth the computation of basic and diluted earnings per share:
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net Loss (a) | ( | ) | ( | ) | ||||
| Basic weighted average common shares outstanding (b) | ||||||||
| Dilutive effect of convertible note (1) | ||||||||
| Dilutive effect of stock-based awards | ||||||||
| Diluted weighted average common shares outstanding | ||||||||
| Earnings per share attributable to SS INNOVATIONS INTERNATIONAL INC. stockholders: | ||||||||
| Basic and Diluted (a)/(b) | ( | ) | ( | ) | ||||
| (1) |
Basic net loss per share is calculated by dividing the net loss attributable to SSII stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period. For periods in which we report net losses, diluted net loss per share is the same as basic net loss per share because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
| (s) | Research and Development Costs |
Research and development costs are expensed as incurred and include costs of material, salaries, benefits and other headcount-related costs, contract and other outside service fees, and facilities and overhead costs.
| (t) | Fair Value of Financial Instruments |
Our financial instruments consist principally of accounts receivable, amounts due to related parties and promissory notes payable. The carrying amounts of cash and cash equivalents and promissory notes approximate fair value because of the short-term nature of these items.
| (u) | Recent Accounting Pronouncements |
In November 2024, FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to disaggregate any relevant expense caption presented on the face of the income statement within continuing operations into the following required natural expense categories, as applicable: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities or other depletion expenses. An entity’s share of earnings or losses from investments accounted for under the equity method is not a relevant expense caption that requires disaggregation. Such ASU’s amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of this pronouncement on our disclosures and our consolidated financial statements.
In November 2023, FASB issued ASU No. 2023-07, Segment Reporting (“ASC Topic 280”): Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements on an annual and interim basis for all public entities by requiring disclosure of significant segment expenses that are regularly reviewed by the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The ASU also allows, in addition to the measure that is most consistent with U.S. GAAP, the disclosure of additional measures of segment profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.
F-16
We adopted this ASU on December 31, 2024, and applied the amendment retrospectively to all periods presented in our consolidated financial statements (refer to Note 3, Segments, for further details).
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Under this ASU, public entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). This ASU’s amendments are effective for all entities that are subject to Topic 740, Income Taxes, for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of this pronouncement on our disclosures.
| (v) | Leases |
The Company determines if an arrangement is a lease at inception of the contract. The Company’s assessment is based on whether: (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term of the contract, and (3) the Company has the right to direct the use of the asset. A lease is classified as a finance lease if any one of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset or (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset.
Operating leases are presented within “Right-of-use assets, operating lease” “Current portion of operating lease liabilities” and “Operating lease liabilities, less current portion” in the Company’s consolidated balance sheets.
Right-of-use assets (ROU) assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease arrangement. Lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease ROU assets are recognized at commencement date in an amount equal to lease liability, adjusted for any lease prepayments, initial direct costs, and lease incentives. For leases in which the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date. The Company determines the incremental borrowing rate by adjusting the benchmark reference rates with appropriate financing spreads applicable to the respective geographies where the leases are entered and lease specific adjustments for the effects of collateral, if applicable. Lease terms include the effects of options to extend or terminate the lease when it is reasonably certain at commencement of the lease that the Company will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term reflecting single operating lease cost. The Company evaluates lease agreements to determine lease and non-lease components, which are accounted for separately.
Lease payments that depend on factors other than an index or rate are considered variable lease payments and are excluded from the operating lease assets and liabilities and are recognized as expense in the period in which the obligation is incurred. Lease payments include payments for common area maintenance, utilities such as electricity, heating and water, among others, and property taxes, and other similar payments paid to the landlord, which are treated as non-lease component.
The Company accounts for lease-related concessions in accordance with guidance in Topic 842, Leases, to determine, on a lease-by-lease basis, whether the concession provided by lessor should be accounted for as a lease modification.
The Company accounts for a modification as a separate contract when it grants an additional right of use not included in the original lease and the increase is commensurate with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract. Modifications which are not accounted for as a separate contract are reassessed as of the effective date of the modification based on its modified terms and conditions and the facts and circumstances as of that date. Upon modification, the Company remeasures the lease liability to reflect changes to the remaining lease payments and discount rates and recognizes the amount of the remeasurement of the lease liability as an adjustment to the ROU assets. However, if the carrying amount of the ROU assets is reduced to zero as a result of modification, any remaining amount of the remeasurement is recognized as an expense in Consolidated Statements of Operations and Comprehensive Loss.
The Company reviews ROU assets for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable.
Comprehensive Loss
Comprehensive loss consists of net loss and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net loss. Our other comprehensive loss represents foreign currency translation adjustment attributable to Indian operations. Refer to Consolidated Statements of Comprehensive Loss. Total foreign currency transaction gains and losses were immaterial for the years ended December 31, 2024, and 2023.
F-17
NOTE 3 – SEGMENT INFORMATION
The Company is focused on designing, manufacturing and marketing an advanced, next-generation and affordable surgical robotic system called the SSi Mantra, and the instruments and accessories used with SSi Mantra to perform a wide range of soft-tissue, robotically assisted surgeries. The Company is committed to accelerating access to surgical robotics technologies in all parts of the world and particularly in underserved regions through a comprehensive ecosystem of providing an affordable surgical robotic system, its related instruments and accessories backed up by clinical, field service and maintenance support also provided by the Company. The systems as well as instruments and accessories are primarily designed, developed and manufactured by the Company in its manufacturing facility located in India.
During the year ended December 31, 2024, and
2023, the Company’s revenues from within India accounted for
The Company’s Chief Executive Officer is the Chief Operating Decision Maker (“CODM”). The CODM utilizes the Company’s long-range plan, which includes product development, technology refinement plans and long-range selling and financial models, as a key input to resource allocation. The CODM makes decisions on resource allocation, assesses performance of the business, and monitors budget versus actual results using gross margins and net income / loss from operations.
Significant expenses within income from operations, as well as within net income / loss, include cost of revenue, research and development, and selling, general and administrative expenses, which are each separately presented on the Company’s Consolidated Statements of Operations. Other segment items within net income include interest and other income, net, and income tax expense.
The Company’s long-lived assets consist
primarily of property, plant and equipment. As of December 31, 2024, and 2023,
NOTE 4 – PROPERTY, PLANT AND EQUIPMENT, NET
The Company’s property, plant and equipment consisted of the following:
| December 31, 2024 | December 31, 2023 | |||||||
| Gross Amount | ||||||||
| Computer & peripheral | ||||||||
| Furniture | ||||||||
| Leasehold improvement | ||||||||
| Office equipment | ||||||||
| Pay Per Use Systems | ||||||||
| Plant and machinery | ||||||||
| R & D equipment | ||||||||
| Server & networking | ||||||||
| Vehicles | ||||||||
| Demo system | ||||||||
| Capital work in progress | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total | ||||||||
Depreciation expenses for the year ended December 31, 2024, and December
31, 2023, amounted to $
From its inventory, the Company decided to use 4 systems for demonstration purposes. As at December 31, 2024, three systems are placed in Company’s premises while 1 system is placed at partner’s location. Hence, these systems are recorded as Property, plant and equipment in accordance with ASC 360.
F-18
NOTE 5 – REVERSE RECAPITALIZATION
The Transaction
On April 14, 2023 (“Closing”), the Company consummated the acquisition of CardioVentures, Inc., a Delaware corporation (“CardioVentures”), pursuant to a Merger Agreement dated November 7, 2022 (the “Merger Agreement”). This agreement was executed among AVRA-SSI Merger Corporation, a wholly owned subsidiary of the Company (“Merger Sub”), CardioVentures, and Dr. Sudhir Srivastava, who, through his holding company, owned a controlling interest in CardioVentures.
At Closing, Merger Sub merged with and into CardioVentures (the “Merger”), with CardioVentures being determined as the accounting acquirer for financial reporting purposes in accordance with ASC 805. The transaction was accounted for as a reverse recapitalization, with AVRA being treated as the accounting acquiree. This determination was based on several factors:
| ● | CardioVentures’ stockholders obtained the largest portion of voting rights in the post-combination company. |
| ● | The Board and management of the combined entity are primarily composed of individuals associated with CardioVentures. |
| ● | CardioVentures had a larger entity size based on historical operations, assets, revenues, and workforce. |
| ● | The ongoing operations, post-combination, are those of CardioVentures. |
Merger Consideration and Share Issuance: As
part of the Merger, holders of CardioVentures’ outstanding common stock, including certain parties who provided interim convertible
financing, were issued
Pursuant to the Merger Agreement, the holders
of CardioVentures’ common stock also received
| ● | Vote together with SSII common stock as a single class, except as required by law. |
| ● | Entitle holders to exercise |
| ● | 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 |
F-19
Restructuring and Capital Contributions: Concurrent with the Merger:
| ● | The Company changed its name to “SS Innovations International, Inc.,” effected a |
| ● | Dr. Sudhir Srivastava, through his holding company, assigned patents, trademarks, and other intellectual property related to its surgical robotic systems to a wholly owned subsidiary of SSII. |
| ● | Dr. Frederic Moll and Andrew Economos provided interim financing during 2022, contributing $ |
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
NOTE 6 – ACCOUNTS RECEIVABLE
Accounts receivable consisted of:
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Accounts receivable, net (current) | ||||||||
| Accounts receivable, net (non-current) | ||||||||
| Total accounts receivable, net | ||||||||
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 $
Details of customers which accounted for 10% or more of total revenues or 10% or more of total accounts receivables during the years ended December 31, 2024, and 2023:
| Percentage of revenue | Percentage of accounts | |||||||||||||||
| for year ended | receivable as of | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Customer A | % | % | % | |||||||||||||
| Customer B | % | % | ||||||||||||||
| Customer C | % | |||||||||||||||
| Customer D | % | % | ||||||||||||||
| ^ |
F-20
NOTE 7 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH
For the purpose of consolidated statement of cash flows, cash, cash equivalents and restricted cash (Current) & (Non-Current) consisted of the following as of December 31, 2024, and December 31, 2023:
| 2024 | 2023 | |||||||||
| Cash and cash equivalents | ||||||||||
| Fixed Deposit | Lien Against Overdraft Facility | |||||||||
| Lien Against Letter of Credit | ||||||||||
| Lien Against Bank Guarantee | ||||||||||
| Restricted cash (Current) | ||||||||||
| Fixed Deposit | Lien Against Bank Guarantee | |||||||||
| Lien against Credit card facility | ||||||||||
| Restricted Cash (Non- current) | ||||||||||
| Total Cash, cash equivalents and restricted cash | ||||||||||
We have classified fixed deposits (FDs), which are subject to withdrawal restrictions, as restricted cash. Additionally, time deposits with a maturity of over one year have been classified as non-current.
The Company has secured a bank overdraft facility from HDFC Bank, collateralized by fixed deposits held with HDFC Bank. This facility includes a withdrawal restriction tied to the fixed deposit. (Refer Note 11 – Bank Overdraft.)
NOTE 8 – PREPAID, CURRENT AND NON- CURRENT ASSETS
Prepaid, Current and Non-Current Assets consisted of the following as of December 31, 2024, and December 31, 2023:
| 2024 | 2023 | |||||||
| Receivables from statutory authorities | ||||||||
| Prepaid expense - stock compensation current | ||||||||
| Security deposit | ||||||||
| Other prepaid- current assets | ||||||||
| Prepaid and other current assets | ||||||||
| Prepaid expense - stock compensation non-current | ||||||||
| Security deposits | ||||||||
| Other prepaid- non-current Asset | ||||||||
| Prepaid and other non-current assets | ||||||||
| Total Prepaid, Current and Non-Current Assets | ||||||||
Prepaid expenses – stock compensation represents unamortized portion of common stock granted to advisors for services to be rendered by them in future. Refer Note 20.
Refer Note-21 for Related Party Balances.
F-21
NOTE 9 – ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accounts payable and accrued expenses consisted of the Year ended December 31, 2024 and December 31, 2023:
| 2024 | 2023 | |||||||
| Accounts Payable | ||||||||
| Payable to statutory authorities | ||||||||
| Client liabilities | ||||||||
| Salary payable | ||||||||
| Other accrued liabilities | ||||||||
| Other accrued liabilities | ||||||||
| Provision for Gratuity | ||||||||
| Other accrued liabilities- non-current | ||||||||
| Total accounts payable, accrued expense and other liabilities | ||||||||
Accounts payable at $
Refer Note-21 for Related Party Balances.
NOTE 10 – NOTES PAYABLE
On April 15, 2023, the Company executed a Convertible
Promissory Note (the “Line of Credit Note”) with Sushruta Pvt Ltd. (“Sushruta”), the Bahamian holding company
owned by Dr. Sudhir Srivastava, our Chairman, Chief Executive Officer, and principal shareholder. Pursuant to the Line of Credit Note,
SPL, in its discretion may make multiple advances to the Company through December 31, 2023 (the “Maturity Date”), in an aggregate
amount of up to $
The Company entered into an Agreement with Andrew
Economos and Dr. Frederic Moll for issuing a convertible redeemable note in the principal amount of $
In February 2024, the Company raised $
In April 2024, the Company raised $
In July 2024, the Company raised $
In October and November 2024, the Company raised
$
In December 2024, the Company raised $
Refer Note-21 for Related Party Balances.
F-22
NOTE 11 – BANK OVERDRAFT
Bank Overdraft consisted of:
| Year Ended | ||||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| HDFC Bank Ltd overdraft (with lien against fixed deposits) (OD1) | ||||||||
| HDFC Bank Ltd overdraft (OD2) | ||||||||
| Bank overdraft | ||||||||
The HDFC Bank overdraft (OD1) of $
HDFC Bank has sanctioned overdraft facilities subject to operational terms and conditions, including payment on demand, comprehensive insurance coverage against all risks of primary security, periodic inspections of the plant by the bank, and submission of monthly stock and financial records to the bank within 30 days after each month-end. Security for this facility includes current assets, plant and machinery, furniture and fixtures, and a personal guarantee from Dr. Sudhir Prem Shrivastava.
The cash credit facility is sanctioned at an interest
rate of
NOTE 12 – BORROWINGS
As part of our efforts to manage working capital
and improve liquidity, we arranged for Axis Bank to issue a Letter of Credit (LC) on behalf of one of our customers, Indraprastha Cancer
Society & Research Centre (RGCI), for $
| 2024 | 2023 | |||||||
| Current maturities of long-term debt | ||||||||
NOTE 13 – DEFERRED REVENUE
Contract liabilities (deferred revenue) consist of advance billings and billing in excess of revenues recognized. Deferred revenue also includes the amount for which services have been rendered but other conditions of revenue recognition are not met, for example, where the Company does not have an enforceable contract.
The revenue attributable to the warranty is recognized over the period to which it relates. During the year ended December 31, 2024, Company had sold 36 surgical robotic systems. The revenues attributable to warranty for the agreed warranty period in respect of each of the sales contract is deferred for recognition over the period to which it relates.
F-23
In case of systems sold on a deferred payment
basis, the present value of the invoiced system sales, realizable over the deferred payment period, is recognized as system sales. The
difference between the invoiced amount and its present value is adjusted (reduced) in the accounts receivable balance. This difference
is recorded as interest income under other income, with a corresponding impact on accounts receivable over the collection period of contract.
The Company recorded $
| For year ended | For year ended | |||||||
| December 31, 2024 | December 31, 2023 | |||||||
| Deferred revenue— beginning of period | ||||||||
| Additions | ||||||||
| Net changes in liability for pre-existing contracts | ||||||||
| Revenue recognized for warranty sales | ||||||||
| Revenue recognized for instrument sales | ||||||||
| Deferred revenue— end of period | ||||||||
| As of December 31, 2024 | As of December 31, 2023 | |||||||
| Deferred revenue expected to be recognized in: | ||||||||
| One year or less | ||||||||
| More than One year | ||||||||
The following table disaggregates our revenue by major source:
| Year ended December 31, 2024 | Year ended December 31, 2023 | |||||||
| System Sales | ||||||||
| Instruments Sale | ||||||||
| Warranty Sales | ||||||||
| Lease income | ||||||||
| Total revenue | ||||||||
Revenues for each of the two years in the period ended December 31, 2024 and 2023 by geographic region (determined based upon customer domicile), were as follows:
| Year ended December 31, 2024 | Year ended December 31, 2023 | |||||||
| India | ||||||||
| Nepal | - | |||||||
| UAE | ||||||||
| Indonesia | ||||||||
| South America | - | |||||||
F-24
NOTE 14 – STOCKHOLDERS’ EQUITY
Common stock
The Company is authorized to issue up to
As of December 31, 2024, there were
Preferred stock
The Company is authorized to issue up to
As
of December 31, 2024, there were
Common stock issued at the time of Merger
At Closing of the Merger on April 14, 2023,
Common Stock issued post-Merger
During the year ended December 31, 2023, $
During the year ended December 31, 2023, the Company
converted warrants and issued
In December 2023, the Company received $
During the year ended December 31, 2023, Farhan
Taghizadeh exercised options and received
During the year ended on December 31, 2023, the
Company issued
During the Year ended on December 31, 2023, the
Company issued
During the Year ended on December 31, 2023, the
Company issued
During the year ended on December 31, 2023, the
Company issued
F-25
During the year ended on December 31, 2023, the
Company issued
During the year ended on December 31, 2023, the
Company issued
During the year ended on December 31, 2023, the
Company issued
During the year ended on December 31, 2023, the
Company issued
During the year ended on December 31, 2023, the
Company issued
On November 27, 2023, the Company issued
On November 27, 2023, the Company issued
On March 1, 2024 the Company issued
On August 31, 2024, the Company issued
On November 27, 2024, the Company issued
On November 27, 2024, the Company issued
On December 2, 2024, the Company issued
Holders of common stock are entitled to one vote for each share of common stock held.
F-26
NOTE 15 – INVENTORY
Inventory for the year ended consisted of the following as on:
| December 31, 2024 | December 31, 2023 | |||||||
| Raw materials (includes goods in transit $ | ||||||||
| Work-in-progress | ||||||||
| Finished goods | ||||||||
NOTE 16 – LEASES
The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates.
The following is a summary of operating lease assets and liabilities:
| As of December 31 | ||||||||
| Operating leases | 2024 | 2023 | ||||||
| Assets | ||||||||
| ROU operating lease assets | ||||||||
| Liabilities | ||||||||
| Current portion of operating lease | ||||||||
| Non Current portion of operating lease | ||||||||
| Total lease liabilities | ||||||||
| As of December 31 | ||||||||
| Operating leases | 2024 | 2023 | ||||||
| Weighted average remaining lease term (years) | ||||||||
| Ilabs Info Technology 3rd Floor | ||||||||
| Ilabs Info Technology 1st Floor | ||||||||
| Ilabs Info Technology Ground Floor | ||||||||
| Village Chhatarpur-1849-1852-Farm | ||||||||
| Weighted average discount rate | ||||||||
| Ilabs Info Technology 3rd Floor | % | % | ||||||
| Ilabs Info Technology 1st Floor | % | |||||||
| Ilabs Info Technology Ground Floor | % | % | ||||||
| Village Chhatarpur-1849-1852-Farm | % | % | ||||||
Supplemental cash flow and other information related to leases are as follows:
| Year ended December 31 | ||||||||
| 2024 | 2023 | |||||||
| Cash payments for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash outflows for operating leases | ||||||||
F-27
Maturities of lease liabilities as of December 31, 2024 were as follows:
| Operating Leases | ||||
| Fiscal Year | Amount (in $) |
|||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and thereafter | ||||
| Total Lease Payment | ||||
| Less: Imputed Interest | ||||
| Present value of lease liabilities | ||||
NOTE 17 – INCOME TAX
The Company has not recorded income tax benefits for the net operating losses incurred during the years ended December 31, 2024, and 2023 nor for other deferred tax assets generated, due to its uncertainty of realizing a benefit from those items.
The components of income/(loss) before income taxes consist of the following:
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Domestic | ( | ) | ( | ) | ||||
| Foreign | ( | ) | ( | ) | ||||
| Total | ( | ) | ( | ) | ||||
The Company has federal and state net operating losses as of December 31, 2024, and 2023.
The Company has not recorded any amounts for unrecognized tax benefits as of December 31, 2024, and 2023. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual of interest and penalties on the Company’s balance sheets and has not recognized interest and penalties in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024, and 2023.
The Company is subject to taxation in the United States and India. The Company’s tax returns filed has no pending examinations in India and US.
F-28
The effective income tax rate differs from the amount computed by applying the income tax rate of India to Income/(Loss) before income taxes approximately as follows:
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Accounting income / (loss) before income tax | ( | ) | ( | ) | ||||
| Income tax expense (benefit) at federal statutory rate at | ( | ) | ( | ) | ||||
| Foreign tax rate differential | ( | ) | ( | ) | ||||
| Non-deductible expenses | ( | ) | ||||||
| Excess tax benefit / (expense) on depreciation | ( | ) | ||||||
| Excess tax expense on security deposit | ||||||||
| Impact of unrecognized deferred tax asset on the loss of the year | ||||||||
| Income tax expense/(benefit) | ||||||||
The Company recorded income tax expense for the years ended December 31, 2024, and 2023 due to losses in current year and prior year and it does not expect to recover the tax benefit on the losses incurred during the years ended December 31, 2024, and 2023.
The components of the deferred tax balances were as follows:
| December 31, 2024 | December 31, 2023 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carry forwards | ||||||||
| Net operating loss | ||||||||
| Lease payments | ||||||||
| Credit loss reserve | - | |||||||
| Others | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Depreciation and amortization | ||||||||
| Others | ||||||||
| Deferred tax liabilities | ||||||||
| Net deferred tax assets/liability | - | |||||||
Deferred tax assets and liabilities are recognized
for future tax consequences attributable to temporary differences between the financial statement carrying values of assets and liabilities
and their respective tax bases and operating loss carry forwards. The Company performed an analysis of the realizability of deferred tax
assets as of December 31, 2024, and 2023 and recorded a valuation allowance of $
NOTE 18 – EMPLOYEE BENEFIT PLAN
The Company’s Gratuity Plan in India provides for a lump sum payment to vested employees on retirement or upon termination of employment in an amount based on the respective employee’s salary and years of employment with the Company. Liabilities under this plan are determined by actuarial valuation using the projected unit credit method. Current service costs for these plans are accrued in the year to which they relate. Actuarial gains or losses or prior service costs, if any, resulting from amendments to the plans, are recognized and amortized over the remaining period of service of the employees.
The Gratuity Plan is unfunded, and the company does not make contributions to the plan assets.
F-29
The has been measured as of December 31, 2024, and 2023. The following table sets forth the activity and the amounts recognized in the Company’s consolidated financial statements at the end of the relevant periods:
| Year ended December 31, | ||||||||
| Change in projected benefit obligation | 2024 | 2023 | ||||||
| Projected benefit obligation as of January 1 | ||||||||
| Service cost | ||||||||
| Interest cost | ||||||||
| Benefits paid | - | |||||||
| Actuarial loss (^) | ||||||||
| Effect of exchange rate changes | ( | ) | ( | ) | ||||
| Projected benefit obligation as of December 31 | ||||||||
| Unfunded status as of December 31 | ||||||||
| Unfunded amount recognized in the consolidated balance sheets | ||||||||
| Non-current liability (included under other non-current liabilities) | ||||||||
| Current liability (included under accrued expenses and other current liabilities) | ||||||||
| Total accrued liability | ||||||||
| Accumulated benefit obligation as of December 31 | ||||||||
| (^) |
Components of net periodic benefit costs recognized in Consolidated Statements of operations and comprehensive loss and actuarial loss reclassified from AOCI, were as follows:
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Service cost | ||||||||
| Interest cost | ||||||||
| Expected return on plan assets | ||||||||
| Amortization of actuarial loss, gross of tax | ||||||||
| Net gratuity cost | ||||||||
The components of retirement benefits included in AOCI, excluding tax effects, were as follows:
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net actuarial loss | ||||||||
| Amount recognized in AOCI, excluding tax effects | ||||||||
The weighted average actuarial assumptions used to determine benefit obligations and net gratuity cost were:
| 2024 | 2023 | |||||||
| Discount rate | % | % | ||||||
| Rate of increase in compensation levels | % | % | ||||||
F-30
The Company evaluates these assumptions annually
based on its long-term plans of growth and industry standards.
| Expected benefit payments during the year ending December 31, | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 – 2033 | ||||
NOTE 19 – FAIR VALUE MEASUREMENT – FINANCIAL INSTRUMENTS
Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:
| ● | Level 1: observable inputs such as quoted prices in active markets. |
| ● | Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and |
| ● | Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions. |
The company’s financial assets which are set out below in the table is measured at fair value by considering the level III inputs. The company does not have financial assets which are measured using Level I or Level II inputs.
Carrying value and fair value of Level III Financial assets and liabilities:
| Carrying Value | Fair value | |||||||||||||||
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||||||
| Financial Assets | ||||||||||||||||
| Account receivables net (1) | ||||||||||||||||
| Other non-current financial assets (2) | ||||||||||||||||
| Total | ||||||||||||||||
| Financial Liabilities | ||||||||||||||||
| Lease liabilities (3) | ||||||||||||||||
| Total | ||||||||||||||||
| (1) |
| (2) |
| (3) |
The Company has assessed that the financial instruments that are not carried at fair value consist primarily of cash and cash equivalents, restricted cash, prepaid and other current assets, note payable, Bank overdraft facility and account payable for which fair values approximate their carrying amounts due to the short-term maturities of these instruments.
F-31
NOTE 20 – STOCK COMPENSATION EXPENSES
Stock options to Employees: The Company grants shares of the Company’s common stock, par
value $
Restricted Stock Award to Employees: The Company grants restricted shares of the Company’s common
stock, $
Stock Options issued to Doctors/Proctors/Advisors (“Advisor’s”): The Company issues shares of the Company’s common stock (“Advisory Shares”) to retain and compensate certain Advisors for performing services for the Company and in exchange for the compensation, which is issued in a phased manner as determined by the company. The “Services” include but are not limited to (a) providing proctoring and medical advisory services, (b) advising the Company on the development of surgical robotics procedures and improvements in design and technology (c) participation in case of observation and performance of live surgeries, and (d) disseminating information about the Company’s products in various scientific meetings and surgical robotic conferences globally (e) investor’s digital marketing support. The Company issues such Advisory Shares in a phased manner commensurate with the period over which the services are to be performed, as determined by the Company.
Stock Options
Stock options activity for the year ended December 31, 2024, was as follows:
| Number of Shares Options | Weighted average grant date fair value per share | |||||||
| Unvested balance as of December 31, 2023 | $ | |||||||
| Granted | $ | |||||||
| Vested | $ | |||||||
| Forfeited | ||||||||
| Unvested balance as of December 31, 2024 | $ | |||||||
| Number of Shares Options | Weighted average grant date fair value per share | |||||||
| Exercisable balance as of December 31, 2024 | $ | |||||||
Stock options activity for the year ended December 31, 2023, was as follows:
| Number of shares options | Weighted average grant date fair value | |||||||
| Unvested balance as of December 31, 2022 | ||||||||
| Granted | $ | |||||||
| Vested | $ | |||||||
| Forfeited | ||||||||
| Unvested balance as of December 31, 2023 | $ | |||||||
F-32
| Number of Shares Options | Weighted average grant date fair value per share | |||||||
| Exercisable balance as of December 31, 2023 | $ | |||||||
The aggregate fair value of the stock options vested was $
Restricted Stock Awards (RSA)
Restricted Stock Awards activity for the year ended December 31, 2024, was as follows:
| Number of Shares RSAs | Weighted average grant date fair value per share | |||||||
| Unvested balance as of December 31, 2023 | $ | |||||||
| Granted | ||||||||
| Vested | $ | |||||||
| Forfeited | ||||||||
| Unvested balance as of December 31, 2024 | $ | |||||||
| Number of Shares RSAs | Weighted average grant date fair value per share | |||||||
| Exercisable balance as of December 31, 2024 | ||||||||
Restricted Stock Awards activity for the year ended December 31, 2023, was as follows:
| Number of Shares RSAs | Weighted average grant date fair value per share | |||||||
| Unvested balance as of December 31, 2022 | ||||||||
| Granted | $ | |||||||
| Vested | $ | |||||||
| Forfeited | ||||||||
| Unvested balance as of December 31, 2023 | $ | |||||||
| Number of Shares RSAs | Weighted average grant date fair value per share | |||||||
| Exercisable balance as of December 31, 2023 | ||||||||
During the year ending December 31, 2024,
The aggregate vesting date fair value of RSUs vested was $
F-33
Advisory shares:
Common stock issued to consultants as advisory shares during the year as follows:
| Grant dates | Fair value on grant date | Unvested shares in the beginning | Shares granted during the year | Option vested | Unvested share at year end | |||||||||||||||
| 1-Jun-23 | - | - | ||||||||||||||||||
| 31-Oct-23 | - | |||||||||||||||||||
| 31-Oct-23 | - | |||||||||||||||||||
| 31-Oct-23 | - | |||||||||||||||||||
| 31-Oct-23 | - | |||||||||||||||||||
| 1-Mar-24 | - | |||||||||||||||||||
| 21-Aug-24 | - | |||||||||||||||||||
| 31-Aug-24 | - | |||||||||||||||||||
| 31-Aug-24 | - | |||||||||||||||||||
| 31-Aug-24 | - | |||||||||||||||||||
| 31-Aug-24 | - | |||||||||||||||||||
| 2-Dec-24 | - | |||||||||||||||||||
During the year ending December 31, 2024,
The aggregate vesting date fair value of Advisory
shares vested was $
Stock compensation expenses
During the year ended December 31, 2024, the Company
has recorded share compensation expense of $
| For the year ended December 31, 2024 | For the year ended December 31, 2023 | |||||||
| Stock options | ||||||||
| Restricted stock units (RSU) | ||||||||
| Advisory shares | ||||||||
| Total stock compensation expenses | ||||||||
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.
| Year ended December 31, 2024 | ||||||||||||
| Stock Options | Stock Options | Restricted stock awards | ||||||||||
| Grant date | February 13, 2024 | November 27, 2023 | November 27, 2023 | |||||||||
| Fair value on grant date | $ | $ | $ | |||||||||
| Risk free interest rate | % | % | % | |||||||||
| Expected volatility | % | % | % | |||||||||
| Exercise prices | $ | $ | $ | |||||||||
| Share price on the grant date | $ | $ | $ | |||||||||
| Expected term of vesting | ||||||||||||
F-34
As share-based compensation expense recognized in the Consolidated Statements of operations and comprehensive loss during the years ended December 31, 2024, and 2023, is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, if any.
As of December 31, 2024, there was $
NOTE 21 – RELATED PARTY
The details of transactions and balances outstanding with the related parties for the year ended December 31, 2024 and 2023 are as follows:
| Particulars | For the year ended December 31, 2024 |
For the year ended December 31, 2023 |
||||||
| Transactions during the year: | ||||||||
| Expenses incurred on behalf of affiliates | ||||||||
| Srivastava Robotic Surgery Pvt Ltd | ||||||||
| SS International Centre For Robotics Surgery Pvt Ltd | ||||||||
| Sudhir Srivastava Medical Innovations Pvt Ltd | ||||||||
| Telegnosis Private Limited | ||||||||
| Reimbursements payable | ||||||||
| Sudhir Prem Srivastava | ( |
) | ( |
) | ||||
| ESOP expenses | ||||||||
| Anup Sethi | ||||||||
| Barry F. Cohen | ||||||||
| Dr. Frederic H Moll | ||||||||
| Dr. S.P. Somashekhar | ||||||||
| Sudhir Prem Srivastava | ||||||||
| Vishwajyoti P. Srivastava, M.D | ||||||||
| Consultancy charges and other perquisites | ||||||||
| Anup Sethi | ||||||||
| Barry F. Cohen | ||||||||
| Sudhir Prem Srivastava | ||||||||
| Vishwajyoti P. Srivastava, M.D | ||||||||
| Proceeds from notes issued | ||||||||
| Sushruta Private Limited | ||||||||
| Interest expense on notes | ||||||||
| Sushruta Private Limited | ||||||||
| Conversion of notes into common stock | ||||||||
| Sushruta Private Limited | ||||||||
F-35
Balances outstanding as on year end:
| As on December 31, 2024 | As on December 31, 2023 | |||||||
| Balance receivable / (payable) | ||||||||
| Accrued expenses & other current liabilities: | ||||||||
| Barry F. Cohen | ( | ) | ( | ) | ||||
| Sushruta Private Limited | ( | ) | ||||||
| Vishwajyoti P. Srivastava, M.D | ( | ) | ( | ) | ||||
| Prepaids and other current assets: | ||||||||
| Srivastava Robotic Surgery Pvt Ltd | ||||||||
| SS International Centre For Robotics Surgery Pvt Ltd | ||||||||
| Cardio Bahamas^ | ( | ) | ( | ) | ||||
| SSI PTE Singapore^ | ( | ) | ( | ) | ||||
| Sudhir Prem Srivastava^ | ||||||||
| Sudhir Srivastava Medical Innovations Pvt Ltd | ||||||||
| Telegnosis Private Limited | ||||||||
| Sushruta Private Limited | ||||||||
| Notes payable: | ||||||||
| Sushruta Private Limited | ( | ) | ||||||
| ^ |
NOTE 22 – COMMITMENTS
The Company, through its SSI-India subsidiary, occupies office, manufacturing,
and assembly space in Gurugram, Haryana (India) under a lease agreement entered into in March 2021, with monthly payments of $
As of December 31, 2024, the Company had committed
to spend approximately $
NOTE 23 – SUBSEQUENT EVENTS
| 1. | In
January 2025, the Company raised $ |
| 2. | In
February 2025, the Company paid $ |
| 3. | In
February 2025, the Company paid $ |
| 4. | In
February 2025, the Company converted Convertible Notes worth $ |
| 5. | In
February 2025, the Company converted three |
| 6. | In
March 2025, the Company raised another $ |
| 7. | In
March 2025, the Company issued |
| 8. | In
April 2025, the Company issued |
F-36
Exhibit 14.2
CERTIFICATION
SS INNOVATIONS INTERNATIONAL, INC.
Insider Trading Compliance Program
And
Insider Trading Policy
Acknowledgement Page
I have received, read, understand and agree to comply with the SS Innovations International, Inc. Insider Trading Compliance Program including the Insider Trading Policy, which is attached thereto as Appendix I to the accompanying Memorandum from our Chairman and Chief Executive Officer.
| Name | |
| Signature | |
| Date |
Insider Trading Reminders
Before trading in the securities of SS Innovations International, Inc. (the “Company”) or discussing Company matters with outsiders, remember:
| 1. | Upon commencement of your services to the Company, you have agreed to maintain the confidentiality of the Company’s information. You should treat all information you learn about the Company or its business plans in connection with your employment or services as confidential and proprietary to the Company. Inadvertent disclosure of confidential or inside information may expose the Company and you to significant risk of investigation and litigation. |
| 2. | It is against the United States federal and state laws to buy or sell Company securities, or to give tips to others regarding Company securities, when you may possess Material Nonpublic Information about the Company, or the selective disclosure of such information to others who may trade on such information. |
| 3. | The Material Nonpublic Information you cannot trade on or tip is any information that could be expected to have a substantial effect on the stock price, either positively or negatively. |
| 4. | As an essential part of your work, many of you have access to Material Nonpublic Information (as defined in the SS Innovations International, Inc. Insider Trading Policy) about the Company or about the Company’s business (including potential transactions and/or sales with other businesses). As such, no director, officer, employee or relative of such person who has Material Nonpublic Information relating to the Company, may buy or sell securities of the Company, directly or indirectly, or engage in any other action to take personal advantage of that information, or pass on such information to others. This applies to information relating to any other company, including acquirers, customers or suppliers, obtained in the course of providing services to the Company. This restriction also applies to your family members and others living in your household. |
| 5. | You must not pass insider information on to others, including family members and others living in your household or friends and casual acquaintances or to anyone on the internet or social media. Employees and service providers are expected to be responsible for the compliance of their immediate family and others living in their households. The above penalties apply whether or not you derive any benefit from another’s actions. |
| 6. | Once the information is publicly disclosed, the Company’s Trading Windows (as defined in the SS Innovations International, Inc. Insider Trading Policy) apply. |
| 7. | These same rules apply to any information you learn on the job about another public company. |
| 8. | Except where required in the performance of your job as a Company forum moderator or administrator, you are prohibited from posting information on social media, or to Internet chat rooms or bulletin boards, that concern the Company and any business of the Company. |
.
2
MEMORANDUM
| TO: | All SS Innovations International, Inc. Directors, Officers, Employees and Consultants |
| FROM: | Sudhir Prem Srivastava, M.D. |
| Chairman and Chief Executive Officer |
| RE: | Prohibition Against Insider Trading and Confidentiality Obligations |
This memorandum is intended to inform all directors, officers, employees and consultants of SS Innovations International, Inc., its affiliates and subsidiaries (collectively, the “Company”) of the Company’s policy against “insider trading” and to remind employees of the importance of maintaining the confidentiality of sensitive Company information.
It is against Company policy and against the law for any employee, consultant or any other person associated with the Company or its employees to trade in common stock or other securities of the Company while possessing Material Nonpublic Information (defined below) about the Company.
A violation of the laws against insider trading by individuals can lead to a civil penalty of up to three (3) times the profit gained or loss avoided, criminal prosecution resulting in prison terms of up to twenty (20) years and monetary penalties of up to $5,000,000 for individuals. A violation by the Company (including its directors, officers, supervisors and the relatives of such individuals) can lead to a civil penalty of up to $1,000,000 and a criminal penalty of up to $25,000,000 (for corporations). A violation of the Company’s policy can also result in immediate termination.
Many employees and consultants have access to Material Nonpublic Information about the Company at one time or another. “Material Nonpublic Information” is information that is not available to the public but which an investor might consider important in deciding whether to buy, hold or sell the Company’s securities. Material Nonpublic Information could include, for example, anticipated quarterly or annual financial and operational results, revenue projections, discussions of a potential acquisition, a significant transaction or contract with a vendor, customer, or other business partner or significant announcements regarding new products or changes for existing products.
In the event you possess Material Nonpublic Information, you should not trade in securities of the Company until the Company has publicly announced the information by press release or similar means, and the information has been available to the public for two (2) full business days.
3
You should also be careful not to disclose Material Nonpublic Information to anyone outside the Company, or to anyone within the Company without a need to know. It is important to maintain the confidentiality of sensitive information in order to protect the Company’s trade secrets and other information that could benefit our competitors. It is also prudent from the perspective of your potential personal liability.
Insider trading laws also apply to any Material Nonpublic Information you may have regarding other companies, including information about our vendors and customers that you might obtain in the course of employment. In the event you hold Material Nonpublic Information regarding another company, you should not trade in securities of that company until that company has publicly disclosed the information for two (2) full business days—ending at the opening of the market on the third (3rd) Trading Day (as defined in the SS Innovations International, Inc. Insider Trading Compliance Program attached as Appendix 1 to this Memorandum, following the date of public disclosure of the information.
In addition to the foregoing restrictions, directors, officers and certain employees with regular access to particularly sensitive information (as advised by the Company) must preclear all trades in Company securities with the Company’s Chief Financial Officer, who is our Insider Trading Compliance Officer, and are subject to certain other restrictions.
The Company has adopted a detailed policy with respect to these matters. A copy of the policy is attached.
4
APPENDIX 1
INSIDER TRADING COMPLIANCE PROGRAM
SS INNOVATIONS INTERNATIONAL, INC.
In order to take an active role in the prevention of insider trading violations by its directors, officers, employees and other related individuals, SS Innovations International, Inc. (the “Company”) has adopted the policies and procedures described in this document.
I. Adoption of Insider Trading Policy.
The Company has adopted the Insider Trading Policy attached as Exhibit A hereto (the “Policy”), which prohibits trading based on material nonpublic information regarding the Company (“Material Nonpublic Information”). The Policy covers directors, officers and all other employees of, or consultants or contractors to, the Company, as well as family members of such persons, and others, in each case where such persons have or may have access to Material Nonpublic Information. The Policy (and/or a summary thereof) is to be delivered to all new employees and consultants upon the commencement of their relationships with the Company, and is to be circulated to all employees annually.
II. Designation of Restricted Persons.
A. Section 16 Individuals. The Company has determined that those persons listed on Attachment II are directors and officers who will be subject to the reporting and liability provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder (“Section 16 Individuals”) once the Company transitions to a major U.S. stock exchange. Exhibit B will be amended from time to time as appropriate to reflect (i) the election of new directors or officers; (ii) any change in function of current officers; and (iii) the resignation or departure of current directors or officers.
B. Other Persons. The Company may determine that certain other persons, together with the Section 16 Individuals, should also be subject to the preclearance requirement set forth in Section IV.A. below.
C. Trading Groups. The Company, from time to time, will determine, for purposes of restricting the trading of the Company’s securities, those individuals who are in possession of Material Nonpublic Information. This determination will be based on the following group definitions:
Group 1: All Section 16 Individuals and those employees who, from time to time, are in possession of Material Nonpublic Information and whose trades are subject to preclearance by the Company’s Insider Trading Compliance Officer.
Group 2: All employees and consultants who are generally not in possession of Material Nonpublic Information.
5
These trading groups will change, from time to time, based on the Company’s belief that, in the normal course of their duties, such persons have, or are likely to have, regular access to Material Nonpublic Information.
The Company will notify individuals upon commencement of employment or services as to which trading group they are in, and will notify individuals as necessary thereafter in the event that the Company has determined that an individual’s trading group designation should be changed.
III. Appointment of the Insider Trading Compliance Officer.
The Company has appointed its Chief Financial Officer as the Company’s Insider Trading Compliance Officer.
IV. Duties of the Insider Trading Compliance Officer.
The duties of the Insider Trading Compliance Officer shall include, but not be limited to, the following:
A. Preclearing all transactions involving the Company’s securities by those individuals falling within Group 1, including Section 16 Individuals, in order to determine compliance with the Policy, insider trading laws, Section 16 of the Exchange Act and Rule 144 promulgated under the Securities Act of 1933, as amended. An individual proposing a transaction should complete the preclearance checklist attached as Exhibit C hereto and submit it to the Insider Trading Compliance Officer for signature.
B. Assisting in the preparation and filing of Section 16 reports (Forms 3 and 4) for all Section 16 Individuals. Serving as the designated recipient at the Company of copies of reports filed with the Securities and Exchange Commission (the “SEC”) by Section 16 Individuals under Section 16 of the Exchange Act.
C. Performing periodic cross-checks of available materials, which may include Forms 3 and 4, Form 144, officers and directors’ questionnaires, and reports received from the Company’s transfer agent, to determine trading activity of officers, directors and others who have, or may have, access to Material Nonpublic Information.
D. Circulating the Policy (and/or a summary thereof) to all employees, including Section 16 Individuals, on a periodic basis, and providing the Policy and other appropriate materials to new officers, directors and others who have, or may have, access to Material Nonpublic Information.
E. Assisting the Company’s Board of Directors in implementation of the Policy and Sections I and II of this document.
F. The annual training of all directors, officer and employees to review the Company’s Insider Trading Compliance Program, as well as training of all new directors, officers and employees on an on-going basis.
G. Coordinating with counsel regarding compliance activities with respect to Rule 144 requirements and regarding changing requirements and recommendations for compliance with Section 16 of the Exchange Act and insider trading laws to ensure that the Policy is amended as necessary to comply with such requirements.
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EXHIBIT A
to
insider trading compliance program
OF
SS INNOVATIONS INTERNATIONAL, INC.
Insider Trading Policy
and Guidelines with Respect to
Certain Transactions in Company Securities
This insider trading policy (this “Policy”) provides guidelines to directors, officers, employees, consultants, contractors and other related individuals of SS Innovations International, Inc., its affiliates and subsidiaries (collectively, the “Company”) with respect to transactions in the Company’s securities.
Applicability of Policy
This Policy applies to all transactions in the Company’s securities, including common stock, options for common stock and any other securities the Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company’s stock, whether or not issued by the Company, such as exchange-traded options. It applies to all officers of the Company, all members of the Company’s board of directors, and all employees of, and consultants and contractors to, the Company and its affiliates and subsidiaries (“Covered Persons”) who receive or have access to Material Nonpublic Information (as defined below) regarding the Company. This group of people, members of their immediate families, and members of their households are sometimes referred to in this Policy as “Insiders.” This Policy also applies to any person who receives Material Nonpublic Information from any Insider. Consultants and contract workers are not Company employees, and nothing in this Policy should be construed to the contrary.
Any person who possesses Material Nonpublic Information regarding the Company is an Insider for so long as the information is not publicly known. Any employee, consultant and contractor can be an Insider from time to time, and would, at those times, be subject to this policy.
Statement of Policy
General Policy
It is the policy of the Company to oppose the unauthorized disclosure of any nonpublic information acquired in the workplace and the misuse of Material Nonpublic Information in securities trading.
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Specific Policies
1. Trading on Material Nonpublic Information. No Insider shall engage in any transaction involving a purchase or sale of the Company’s securities, including any offer to purchase or offer to sell, during any period commencing with the date that such Insider first receives Material Nonpublic Information concerning the Company, and ending at the opening of the market on the third (3rd) Trading Day following the date of public disclosure of that information, or at such time as such nonpublic information is no longer material. As used herein, the term “Trading Day” shall mean a day on which national or international stock exchanges and the Nasdaq National Market are open for trading.
2. Black-Out Period; Trading Windows. The period beginning two (2) weeks prior to the end of quarter (March 31, June 30, September 30, December 31) and ending on the opening of the market on the third (3rd) Trading Day following the date of public disclosure of the financial results for that quarter is a particularly sensitive period of time for transactions in the Company’s stock from the perspective of compliance with applicable securities laws. This sensitivity is due to the fact that Covered Persons will, during that period, often possess Material Nonpublic Information about the expected financial results for the quarter. Accordingly, this period of time is referred to as a “black-out” period. All Covered Persons are prohibited from trading during such period. In addition, from time to time Material Nonpublic Information regarding the Company may be pending. While such information is pending, the Company may impose a special “black-out” period during which the same prohibitions and recommendations shall apply.
Accordingly, to ensure compliance with this Policy and applicable federal and state securities laws, all Covered Persons may only conduct transactions involving the purchase or sale of the Company’s securities on certain days, as set forth in the following table:
Trading Window for All Covered Persons
| Start: | End: | |||
| Trading Permitted: (the “Trading Window”) |
The opening of the market on the third (3rd) Trading Day following the date of public disclosure of the financial results for a particular calendar quarter or year | Two (2) weeks prior to the end of the quarter (Q1: March 31, Q2: June 30, Q3: September 30 and Q4: December 31) | ||
| Trading Prohibited: | Two (2) weeks prior to the end of the quarter (Q1: March 31, Q2: June 30, Q3: September 30 and Q4: December 31) | The opening of the market on the third (3rd) Trading Day following the date of public disclosure of the financial results for that quarter |
The safest period for trading in the Company’s securities, assuming the absence of Material Nonpublic Information, is probably the first ten (10) days of the Trading Window.
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From time to time, the Company may also recommend that directors, officers, selected employees and others suspend trading because of developments known to the Company and not yet disclosed to the public. In such event, such persons will be advised not to engage in any transaction involving the purchase or sale of the Company’s securities during such period and should not disclose to others the fact of such suspension of trading.
It should be noted, however, that even during the Trading Window, any person possessing Material Nonpublic Information concerning the Company should not engage in any transactions in the Company’s securities until such information has been known publicly for at least two (2) Trading Days, whether or not the Company has recommended a suspension of trading to that person. Trading in the Company’s securities during the Trading Window should not be considered a “safe harbor,” and all Covered Persons should use good judgment at all times.
3. Preclearance of Trades. The Company has determined that all officers, directors and certain employees of the Company (Group 1, as defined in the Insider Trading Compliance Program to which this Policy is attached as Exhibit A) are required to comply with the Company’s “preclearance” process (except pursuant to those written programs defined in Section 4 immediately following this section which shall be governed by the provisions thereof). Each director, officer, and relevant employee should contact the Company’s Insider Trading Compliance Officer prior to commencing any trade in the Company’s securities. The Company may find it necessary, from time to time, to require compliance with the preclearance process from certain employees, consultants and contractors other than and in addition to officers and directors.
4. Trading Programs. Pursuant to SEC Rule 10b5-1 (“Rule 10b5-1”), subject to the requirements set forth in this Section 4, directors, officers and employees of the Company (for purposes of this Section 4, “Program-Eligible Persons”) may establish written programs (each a “Program”) which permit (a) automatic trading of the Company’s stock through a third-party broker (an “Automatic Trading Program”); or (b) trading of the Company’s stock by an independent person (such as an investment bank) who is not aware of Material Nonpublic Information at the time of a trade. Once Programs are implemented in accordance with this Section 4, trades pursuant to such Programs shall not be subject to the preclearance requirements of Section 3 immediately above. Trading pursuant to a Program may occur even at a time outside of the Company’s Trading Window or when the Program-Eligible Person is aware of Material Nonpublic Information. Each Program (or the form of Program established by an investment bank or other third party) must be reviewed by the Company’s legal counsel or the Company’s Board of Directors prior to establishment, solely to confirm compliance with this Policy and the securities laws. These Programs are limited to the following three (3) types:
a. An Automatic Trading Program established by a Program-Eligible Person at a time when the Program-Eligible Person is not aware of Material Nonpublic Information. The Automatic Trading Program document must specify the number of shares to be purchased or sold, the price at which transaction(s) is/are to take place, and the date(s) on which each transaction is to be performed. Alternatively, the Automatic Trading Program may establish an objective formula for any or all of these criteria. For example, the number of shares could be specified as a percentage of the Program-Eligible Person’s holdings, the price could be set as a limit order and a date could be determined by the stock price reaching a predetermined level.
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b. A Program where transactions in the Company’s stock are initiated by the trustee of a so-called “blind” trust, provided the Program is established by a Program-Eligible Person at a time when the Program-Eligible Person is not aware of Material Nonpublic Information. A “blind” trust is a trust established by a Program-Eligible Person, usually for the benefit of the Program-Eligible Person and any spouse, and sometimes for other family members or others. Investment decisions are made by an independent trustee without any involvement or even knowledge of the Program-Eligible Person. The trustee should be a recognized financial institution possessing trust powers. Under this type of Program, the Program-Eligible Person cannot exert any influence over, or even communicate with, the trustee regarding specific investments. If the trustee becomes aware of Material Nonpublic Information regarding the Company, whether from the Program-Eligible Person or otherwise, the trustee may not engage in a purchase or sale of the Company’s stock.
c. A Program where transactions in the Company’s stock are initiated by an independent agent working on behalf of the Program-Eligible Person, provided the Program is established by a Program Eligible Person at a time when he or she is not aware of Material Nonpublic Information. An “independent” agent may be (i) a registered representative of a broker dealer or someone who otherwise works for an investment firm in a managerial capacity; or (ii) any other person not related to, working for or otherwise indebted to the Program-Eligible Person who, in turn, works with a broker dealer or investment bank to effect transactions in the Company’s stock. Such independent agent must not be aware of any Material Nonpublic Information at the time of any trade. Investment decisions are made by the independent agent without any involvement or knowledge of the Program-Eligible Person.
5. Program Restrictions. All Programs shall be subject to the following restrictions:
a. The Program-Eligible Person cannot engage in any separate transaction (such as a hedging transaction), which directly or indirectly alters or offsets authorized transactions made under the Program.
b. Any Program-Eligible Person preparing such a Program must allow for the cancellation of a transaction and/or the suspension of a Program upon notice and request by the Company to the extent the Program or any proposed trade (i) fails to comply with applicable law (e.g., exceeding the number of shares which the Program-Eligible Person may sell under Rule 144 in a rolling three-month (3-month) period), or (ii) would create material adverse consequences for the Company (e.g., due to “pooling” accounting restrictions on affiliates or the imposition of lock-up agreements on Company stockholders).
c. The Program may only be established during a Trading Window.
d. No Program may be established or modified at a time when the Program-Eligible Person is aware of Material Nonpublic Information. In addition, if a Program-Eligible Person is an officer or director of the Company, such Program-Eligible Person must certify in the Program that, at the time of adoption or modification of the Program, such officer or director is not aware of Material Nonpublic Information, and that such officer or director is adopting the Program in good faith and not as part of a plan or scheme to evade the prohibition of Rule 10b-5.
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e. Once a Program is prepared, it cannot be changed or deviated from (as opposed to the termination thereof, which is covered by the following paragraph) except (i) with notice to the Company’s legal department and (ii) at a time when the Program-Eligible Person is permitted to trade in the Company’s stock under this Policy without a Program (i.e., during the Trading Window, and when the Program-Eligible Person is not aware of Material Nonpublic Information).
f. Programs may be terminated at any time, but, if terminated, the Program-Eligible Person may not establish a new Program for a period of ninety (90) to one hundred twenty (120) days following the termination of the prior Program as set forth in SEC Rule 10b5-1.
g. A Program-Eligible Person may not sell more than 50,000 Company shares on any single Trading Day under all Programs established by the Program-Eligible Person pursuant hereto.
h. A Program-Eligible Person is subject to certain mandatory cooling off periods. For directors and officers, the Program must provide for a cooling off period of the later of: (i) ninety (90) days following the Program’s adoption or modification; or (ii) two (2) business days following the disclosure in certain periodic reports of the Company’s financial results for the fiscal quarter in which the Program was adopted or modified (but not to exceed one hundred twenty (120) days following plan adoption or modification) before any trading can commence under the Program. For all other persons that are not a director, an officer or the issuer, no purchases or sales can occur until the expiration of a thirty-day (30-day) cooling off period from the Program adoption or modification.
i. A Program-Eligible Person may not use multiple overlapping 10b5-1 plans; and may not rely on the affirmative defense for a single-trade plan to one such plan during any consecutive twelve-month (12-month) period.
j. A Program-Eligible Person shall cause the Program to provide that all persons entering into a Program must act in good faith with respect to the Program throughout the duration of the Program. The Company may immediately terminate any Program that it determines was put in place either (i) not in good faith; or (ii) as part of a plan or scheme to evade the prohibitions of the securities laws.
In addition, the Company may impose from time to time additional restrictions on Programs proposed to be established by Section 16 Individuals.
The key terms of the Company policy set forth in this Section 4 and Programs established pursuant to it (and trades made pursuant thereto) may be disclosed to the public through a press release, by placement on the Company’s web site or through other means to be determined by the Company in its discretion. The Company shall not have any liability to any Program-Eligible Person as a result of the establishment of a Program, any Company disclosure with respect thereto, or any cancellation of transactions and/or suspension of a Program as discussed above.
6. Tipping. No Insider shall disclose (“Tip”) Material Nonpublic Information to any other person (including family members) where such information may potentially be used by such person to his or her profit by trading in the securities of companies to which such information relates, nor shall such Insider or related person make recommendations or express opinions on the basis of Material Nonpublic Information as to trading in the Company’s securities.
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7. Confidentiality of Nonpublic Information. Nonpublic information, whether material or immaterial, relating to the Company is the property of the Company and the unauthorized disclosure of such information is forbidden. This includes, without limitation, posting any nonpublic information about the Company on Internet chat rooms or bulletin boards.
Potential Criminal and Civil Liability
and/or Disciplinary Action
1. Liability for Insider Trading. Potential penalties for insider trading violations include (a) imprisonment for up to twenty (20) years, (b) criminal fines of up to $5 million and (c) civil fines of up to three (3) times the profit gained or loss avoided. If the Company fails to take appropriate steps to prevent illegal insider trading, the Company may have “controlling person” liability for a trading violation, with civil penalties of up to the greater of $1 million and three (3) times the profit gained or loss avoided, as well as a criminal penalty of up to $25 million. The civil penalties can extend personal liability to Company’s directors, officers and other supervisory personnel if they fail to take appropriate steps to prevent insider trading.
2. Liability for Tipping. Insiders may also be liable for improper transactions by any person (commonly referred to as a “Tippee”) to whom they have disclosed nonpublic information regarding the Company or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in the Company’s securities. The SEC has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, all national and international stock exchanges, as well as the Financial Industry Regulatory Authority (“FINRA”) use sophisticated electronic surveillance techniques to uncover insider trading.
3. Possible Disciplinable Actions. Employees or consultants of the Company who violate this Policy shall also be subject to disciplinary action by the Company, which may include ineligibility for future participation in the Company’s equity incentive plans and immediate termination of employment.
Individual Responsibility
Every director, officer, employee and consultant has the individual responsibility to comply with this Policy, and to ensure compliance by members of their family and household, against insider trading, regardless of whether the Company has recommended a trading window to that Insider or any other Insiders of the Company. The guidelines set forth in this Policy are guidelines only, and appropriate judgment should be exercised in connection with any trade in the Company’s securities at all times.
Except as may be permitted by establishment of a Program and compliance with Rule 10b5-1 as described above, an Insider may, from time to time, have to forego a proposed transaction in the Company’s securities even if such Insider planned to make the transaction before learning of the Material Nonpublic Information and even though the Insider believes they may suffer an economic loss or forego anticipated profit by waiting. Transactions that may be necessary or justifiable for personal reasons (such as the need to raise money for an emergency expenditure) must be reviewed on a case-by-case basis by the Company’s Insider Trading Compliance Officer. Even the appearance of an improper transaction must be avoided to preserve our reputation in adhering to the highest standards of conduct.
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Applicability of Policy to Material Nonpublic Information
Regarding Other Companies
This Policy and the guidelines described herein also apply to Material Nonpublic Information relating to other companies, including, without limitation, the Company’s customers, value-added resellers, original equipment manufacturers, strategic alliances, vendors or suppliers (“Business Partners”), when that information is obtained in the course of employment with, or other services performed on behalf of, the Company. Civil and criminal penalties, and termination of employment, may result from trading on Material Nonpublic Information regarding the Company’s Business Partners. All Covered Persons should treat Material Nonpublic Information about the Company’s Business Partners with the same care required with respect to information related directly to the Company.
Definition of Material Nonpublic Information
It is not possible to define all categories of material information. However, information should be regarded as material if there is a reasonable likelihood that it would be considered important to an investor in making an informed investment decision regarding the purchase, hold or sale of the Company’s securities. Either positive or negative information may be material.
While it may be difficult under this standard to determine whether particular information is material, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information include, without limitation:
| ● | Financial results |
| ● | Projections of future earnings or losses |
| ● | Significant developments in actual or threatened litigation |
| ● | Major changes in senior management |
| ● | The gain or loss of a substantial customer or business partner |
| ● | News of a pending or proposed merger |
| ● | Acquisitions |
| ● | Significant transactions or contracts with Business Partners |
| ● | News of the disposition of a subsidiary |
| ● | Impending bankruptcy or financial liquidity problems |
| ● | New product announcements of a significant nature |
| ● | Significant product defects or modifications |
| ● | Significant pricing changes |
| ● | Stock splits |
| ● | New equity or debt offerings |
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Nonpublic information is information that has not been previously disclosed to the general public and is otherwise not available to the general public.
Certain Exceptions
For purposes of this Policy, the Company considers that the exercise of stock options for cash under the Company’s stock option plans or the purchase of shares under employee purchase plans that may be adopted in the future (but not the sale of any such shares) is exempt from this Policy, since the other party to the transaction is the Company itself and the price does not vary with the market but is fixed by the terms of the option agreement or the plan.
Post-Termination Transactions
This Policy continues to apply to your transactions in Company securities even after you have terminated your employment or other services to Company as follows: if you are aware of Material Nonpublic Information when your employment or service relationship terminates, you may not trade in Company securities until that information has become public or is no longer material. In all other respects, the procedures set forth in this Policy will cease to apply to your transactions in Company securities upon the expiration of any closed Trading Window period that is applicable to your transactions at the time of your termination of employment or services.
Non-Disclosure
Maintaining the confidentiality of the Company’s information is essential for competitive, security and other business reasons, as well as to comply with securities laws and the confidentiality obligations you have promised to the Company upon commencing your employment or other affiliation with the Company. You should treat all information you learn about the Company or its business plans in connection with your employment and/or services as confidential and proprietary to the Company. Inadvertent disclosure of confidential or inside information may expose the Company and you to significant risk of investigation and litigation. The timing and nature of the Company’s disclosure of material information to outsiders is subject to legal rules, the breach of which could result in substantial liability to you, the Company and its management. Accordingly, it is important that responses to inquiries about the Company by the press, investment analysts or others in the financial community be made on the Company’s behalf only through authorized individuals.
Inquiries
Please direct your questions as to any of the matters discussed in this Policy to the Company’s Insider Trading Compliance Officer,.
Additional Information for
Officers and Directors
Directors and officers of the Company must also comply with the reporting obligations and limitations on short-swing transactions set forth in Section 16 of the Exchange Act. The practical effect of these provisions is that officers and directors who purchase and sell the Company’s securities within a six-month (6-month) period must disgorge all profits to the Company whether or not they had knowledge of any Material Nonpublic Information. Under these provisions, and so long as certain other criteria are met, neither the receipt of an option under the Company’s option plans, nor the exercise of that option, is deemed a purchase under Section 16; however, the sale of any such shares is a sale under Section 16. Directors and officers may engage only in direct purchases and sales of the Company’s Common Stock. Moreover, no officer or director may engage in short sales, transactions in put or call options or other derivative securities, or other inherently speculative transactions with respect to the Company’s securities at any time. The Company has provided, or will provide, separate memoranda and other appropriate materials to its directors and officers regarding compliance with Section 16 and its related rules.
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EXHIBIT B
TO
INSIDER TRADING COMPLIANCE PROGRAM
SS INNOVATIONS INTERNATIONAL, INC.
OFFICERS AND DIRECTORS SUBJECT TO SECTION 16
A. Board of Directors:
Dr. Sudhir Srivastava
Dr. Vishwajyoti Srivastava
Mr. Barry F. Cohen
Dr. Mylswamy Annadurai
Dr. S.P. Somashekhar
Mr. Tim Adams
Dr. Frederic H. Moll
B. Executive Officers:
| Name | Title | |
| Dr. Sudhir Srivastava | Chairman of the Board and Chief Executive Officer | |
| Mr. Anup Sethi | Chief Financial Officer | |
| Dr. Vishwajyoti Srivastava | President and Chief Operating Officer – South Asia | |
| Mr. Barry F. Cohen | Chief Operating Officer – Americas |
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EXHIBIT C
TO
INSIDER TRADING COMPLIANCE PROGRAM
SS INNOVATIONS INTERNATIONAL, INC.
INSIDER TRADING COMPLIANCE PROGRAM PRECLEARANCE CHECKLIST
| Individual Proposing to Trade: | |||
| Compliance Officer: | |||
| Proposed Trade Date/Volume: | |||
| Date: |
| ☐ | Trading Window. Confirm that the trade will be made during the Company’s “trading window.” |
| ☐ | Section 16 Compliance. Confirm, if the individual is an officer or director subject to Section 16, that the proposed trade will not give rise to any potential liability under Section 16 as a result of matched past (or intended future) transactions. With respect to Rule 16b-3 plans, ensure that a stock option has been held for at least six (6) months from the date of grant prior to sale of the shares, and that employee stock purchase plan shares, if applicable, have been held for at least six (6) months from the date the purchase price was determined. |
Also, ensure that a Form 4 has been or will be completed and will be timely filed.
| ☐ | Prohibited Trades. Confirm, if the individual is an officer or director subject to Section 16, that the proposed transaction is not a “short sale,” put, call or other prohibited or strongly discouraged transaction. |
| ☐ | Rule 144 Compliance. Confirm that: |
| ¨ | Current public information requirement has been met; |
| ☐ | Shares are not held by affiliate, the selling stockholder has not been an affiliate during the preceding ninety (90) days, current public information requirement and the six (6) months holding period has been met; |
| ☐ | Shares are not held by affiliate, the selling stockholder has not been an affiliate during the preceding ninety (90) days, and one (1) year holding period has been met (current public information requirement not applicable); |
| ☐ | Shares are held by affiliate and the one (1) year holding period has been met; |
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| ☐ | For affiliates, volume limitations are not exceeded (confirm the individual is not part of an aggregated group) or does not apply; |
| ☐ | The manner of sale requirements have been met; and |
| ☐ | The Notice of Form 144 has been completed and filed. |
| ☐ | Rule 10b-5 Concerns. Confirm that (i) the individual has been reminded that trading is prohibited when in possession of any material information regarding the Company that has not been adequately disclosed to the public, and (ii) the Compliance Officer has discussed with the insider any information known to the individual or the Compliance Officer which might be considered material, so that the individual has made an informed judgment as to the presence of Material Nonpublic Information. |
| Signature of Insider Trading Compliance Officer |
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Exhibit 21.1
SUBSIDIARIES OF REGISTRANT
| Name | Jurisdiction of Organization | Percentage of Ownership | ||
| Direct Subsidiaries | ||||
| CardioVentures Inc. | Delaware | 100% | ||
| Avra IP Holdings, Inc. | Delaware | 100% | ||
| SSI IP Holdings, Inc. | Delaware | 100% | ||
| Indirect Subsidiaries | ||||
| Otto Pvt. Ltd. | Bahamas | 100% owned by CardioVentures Inc. | ||
| Sudhir Srivastava Innovations Pvt. Ltd. | India |
91.60% owned directly by Otto Pvt. Ltd.; 7.15% owned directly by the Registrant; and 1.25% owned directly by CardioVentures Inc. | ||
Exhibit 31.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Sudhir Prem Srivastava, M.D., Chairman of the Board and Chief Executive Officer of SS Innovations International, Inc., a Florida corporation (the “Registrant”), certify that:
1. I have reviewed this Annual Report on Form 10-K for the year ended December31, 2024, 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. The Registrant’s other certifying officer and I are 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 our 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 our 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 our 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. The other certifying officer and I have disclosed, based on our 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. |
Dated: April 15, 2025
| SS INNOVATIONS INTERNATIONAL, INC. | ||
| By: | /s/ Sudhir Prem Srivastava | |
| Sudhir Prem Srivastava, M.D. Chairman of the Board and Chief Executive Officer | ||
| (Principal Executive Officer) | ||
Exhibit 31.2
CERTIFICATION OF THE 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, Anup Sethi, Chief Financial Officer of SS Innovations International, Inc., a Florida corporation (the “Registrant”), certify that:
1. I have reviewed this Annual Report on Form 10-K for the year ended December31, 2024, 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. The Registrant’s other certifying officer and I are 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 our 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 our 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 our 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. The other certifying officer and I have disclosed, based on our 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. |
| Dated: April 15, 2025 |
| SS INNOVATIONS INTERNATIONAL, INC. | ||
| By: | /s/ Anup Sethi | |
| Anup Sethi Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
Exhibit 32.1
CERTIFICATION OF THE CHIEF EXECUTIVE 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 Annual Report on Form 10-K of SS Innovations International, Inc., a Florida corporation (the “Company”) for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sudhir Prem Srivastava, M.D., the Chairman of the Board and Chief Executive 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. |
Dated: April 15, 2025
| SS INNOVATIONS INTERNATIONAL, INC. | ||
| By: | /s/ Sudhir Prem Srivastava | |
| Sudhir Prem Srivastava, M.D. Chief Executive Officer | ||
| (Principal Executive Officer) | ||
Exhibit 32.2
CERTIFICATION OF THE 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 Annual Report on Form 10-K, of SS Innovations International, Inc., a Florida corporation (the “Company”) for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anup Sethi, the Chief Financial 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. |
Dated: April 15, 2025
| SS INNOVATIONS INTERNATIONAL, INC. | ||
| By: | /s/ Anup Sethi | |
| Anup Sethi Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
Exhibit 99.1
AUDIT COMMITTEE CHARTER
OF
SS INNOVATIONS INTERNATIONAL, INC.
Effective as of January 1, 2025
I. PURPOSE
The Audit Committee shall provide assistance to the Board of Directors (the “Board”) of SS Innovations International, Inc. (the “Company”) in fulfilling the Board’s responsibility to the Company’s shareholders relating to the Company’s accounting and financial reporting practices, system of internal control, the audit process, the quality and integrity of its financial reporting, and the Company’s process for monitoring compliance with laws and regulations and its code of conduct.
The Audit Committee’s responsibility is oversight. Management of the Company has the responsibility for the Company’s financial statements as well as the Company’s financial reporting process, principles, and internal controls. The independent registered public accounting firm engaged by the Company (the “independent auditor”) is responsible for performing an audit of the Company’s annual financial statements, expressing an opinion as to the conformity of such annual financial statements with generally accepted accounting principles, reviewing the Company’s quarterly financial statements and other procedures. Each member of the Audit Committee shall be entitled to rely on (a) the integrity of those persons within the Company and of the professionals and experts (such as the independent auditor) from which it receives information; (b) the accuracy of the financial and other information provided to the Audit Committee by such persons, professionals or experts absent actual knowledge to the contrary; and (c) representations made by management of the independent auditor as to any non-audit services provided by the independent auditor to the Company.
II. AUTHORITY
The Audit Committee has the authority to conduct or authorize investigations into any matters within its scope of responsibility. Its primary duties and responsibilities are to:
| ● | Appoint, compensate, and oversee the work of any independent auditor; |
| ● | Resolve any disagreements between management and the independent auditor regarding financial reporting; |
| ● | Pre-approve all audit and permitted non-audit services by the independent auditor; |
| ● | Retain independent counsel, accountants, or other advisors or consultants to advise and assist the Audit Committee in carrying out its duties, without needing to seek approval for the retention of such advisors or consultants from the Board, and determine the appropriate compensation for any such advisors or consultants retained by the Audit Committee; |
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| ● | Seek any information it requires from employees of the Company or any direct or indirect subsidiary of the Company (each, a “Subsidiary”), all of whom are directed to cooperate with the Audit Committee’s requests, or external parties; |
| ● | Meet with any officer or employee of the Company (or any Subsidiary), the independent auditor or outside counsel, as necessary, or request that any such persons meet with any members of, or advisors or consultants to, the Audit Committee; and |
| ● | Oversee that management has established and maintained processes to assure compliance by the Company with applicable laws, regulations and corporate policy. |
III. MEMBERSHIP AND PROCEDURES
| A. | Membership and Appointment |
The Audit Committee shall be comprised of not fewer than three (3) independent members of the Board as shall be determined from time to time by the Board. The members of the Audit Committee shall be elected by the Board based on the recommendation of the Nominating and Corporate Governance Committee at the annual organizational meeting of the Board, and shall hold office until his or her successor shall be duly appointed and qualified, or until such member’s earlier resignation or removal from the Audit Committee or the Board. No member of the Audit Committee can have participated in the preparation of the Company’s or any Subsidiary’s financial statements at any time during the past three (3) years.
All members of the Audit Committee shall be “independent,” as such term is defined in Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in that each Audit Committee member may not, other than in his or her capacity as a director or member of any committee of the Board, (a) accept any consulting, advisory, or other compensatory fee from the Company or any Subsidiary; or (b) be an affiliated person of the Company or any Subsidiary. In addition, all members of the Audit Committee shall qualify as “independent directors” for purposes of the listing standards of The Nasdaq Stock Market LLC, as such standards may be changed from time to time; provided, that any non-independent director serving on the Audit Committee pursuant to the “exceptional and limited circumstances” exception available under Nasdaq rules may not serve (i) on the Audit Committee for more than two (2) years; or (ii) as the Chairperson (defined below).
All members of the Audit Committee shall be financially literate by being familiar with basic finance and accounting practices and able to read and understand fundamental financial statements at the time of their appointment to the Audit Committee. Furthermore, at least one member of the Audit Committee shall be designated as the “financial expert” with financial sophistication as defined by having experience in finance or accounting, professional certification in accounting, or any other comparable experience or background, such as being or having been a CEO or CFO or other senior officer with financial oversight responsibilities. The Company shall disclose, in its annual report, whether or not, and if not, the reasons therefor, the Audit Committee includes at least one “audit committee financial expert,” as defined by Item 407(d)(5)(ii) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”).
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| B. | Removal |
The entire Audit Committee or any individual Audit Committee member may be removed with or without cause by the affirmative vote of a majority of the Board. Any Audit Committee member may resign effective upon giving oral or written notice to the Chairman of the Board, the Secretary of the Company, or the Board (unless the notice specifies a later time for the effectiveness of such resignation). The Board may appoint a successor to assume the available position on the Audit Committee when the resignation becomes effective.
| C. | Chairperson |
A chairperson of the Audit Committee (the “Chairperson”) may be designated by the Board. In the absence of such designation, the members of the Audit Committee may designate the Chairperson by the affirmative vote of a majority of the Audit Committee. The Chairperson shall determine the agenda for and the length of meetings and shall have unlimited access to management and to information relating to the Audit Committee’s purposes. The Chairperson shall establish such other rules as may from time to time be necessary and proper for the conduct of the business of the Audit Committee. If a Chairperson has been designated and a tie vote occurs on any issue, the Chairperson’s vote will decide the issue.
| D. | Meetings, Minutes and Reporting |
The Audit Committee shall meet at least four (4) times per year, and more frequently as it deems necessary to carry out its responsibilities. All Audit Committee members are expected to attend each meeting, in person or via video-conference or other electronic methods of communication. Meeting agendas will be prepared and, to the extent practicable, provided in advance to members, along with appropriate briefing materials. The Audit Committee may also act by unanimous written consent in lieu of a meeting.
The Audit Committee shall keep minutes of the proceedings of the Audit Committee. In addition to the specific matters set forth herein requiring reports by the Audit Committee to the Board, the Audit Committee shall report such other significant matters as it deems necessary concerning its activities to the Board. The Audit Committee may appoint a Secretary whose duties and responsibilities shall be to keep records of the proceedings of the Audit Committee for the purposes of reporting Audit Committee activities to the Board and to perform all other duties as may from time to time be assigned to him or her by the Audit Committee, or otherwise at the direction of an Audit Committee member. The Secretary need not be a member of the Audit Committee or a director and shall have no membership or voting rights by virtue of the position.
As part of its job to foster open communication, the Audit Committee should meet separately, at least annually, with management, the director of the internal audit function, if any, and the independent auditor to discuss any matters that the Audit Committee or each of these groups believe should be discussed privately. In addition, the Audit Committee or at least its Chairperson should meet separately with the independent auditor, and management quarterly to review the Company’s financial statements in accordance with Section IV below.
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| E. | Delegation |
The Audit Committee may, by the affirmative vote of a majority of the Audit Committee, designate one or more subcommittees, each subcommittee to consist of one or more members of the Audit Committee. Any such subcommittee, to the extent provided by the Audit Committee and not limited by applicable law, shall have and may exercise all the powers and authority of the Audit Committee. Each subcommittee shall have such name as may be determined from time to time by the Audit Committee. Each subcommittee shall keep regular minutes of its meetings and report the same to the Audit Committee or the Board when required.
| F. | Authority to Retain Advisors |
The Audit Committee shall have the authority, at the Company’s expense and without needing to seek approval from the Board, to retain and terminate consultants, legal counsel, or other advisors, as the Audit Committee deems advisable, including the sole authority to approve any such advisors’ fees and other retention terms.
IV. DUTIES AND RESPONSIBILITIES
The Audit Committee shall be directly responsible for the appointment, retention, compensation, evaluation, oversight and, if necessary, termination of the independent auditor(s) employed by the Company (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work, and each independent auditor shall report directly to the Audit Committee.
The following shall be recurring duties and responsibilities of the Audit Committee in carrying out its purposes. These duties and responsibilities are set forth below as a guide to the Audit Committee, with the understanding that the Audit Committee may alter or supplement them as appropriate under the circumstances, to the extent permitted by applicable law.
| A. | Document Review and Reporting Process |
| 1. | Review and reassess, at least annually, the adequacy of this Charter, recommend any proposed changes to the Board for approval, and ensure appropriate disclosure as may be required by law or regulation. |
| 2. | Review and discuss with management and the independent auditor the Company’s annual financial statements and Annual Report on Form 10-K (the “Form 10-K”) prior to the filing of the Form 10-K or prior to the release of earnings, including a discussion with the independent auditor of the matters required to be discussed under the applicable Statements of Auditing Standards (“SAS”). |
| 3. | Review and discuss with management and the independent auditor each Quarterly Report on Form 10-Q (the “Form 10-Q”) prior to its filing or prior to the release of earnings, including a discussion with the independent auditor of the matters required to be discussed under SAS. The Chairperson may represent the entire Audit Committee for purposes of this review. |
| 4. | Discuss generally the type and presentation of information to be disclosed in the Company’s earnings press releases, as well as financial information and earnings guidance provided to analysts, rating agencies and others. |
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| 5. | Review with management and the independent auditor the effect of regulatory and accounting initiatives that may affect the Company, as well as the effect of any off-balance sheet structures and transactions on the Company’s financial statements. |
| 6. | Regularly report to the Board about Audit Committee activities, issues, and related recommendations. |
| 7. | Foster an open avenue of communication between the internal audit function, if any, the independent auditor and the Board. |
| 8. | Report annually to the shareholders, describing the Audit Committee’s composition, responsibilities and how they were discharged, and any other information required by applicable rules and regulations, including approval of non-audit services. |
| 9. | Review any other reports the Company issues that relate to Audit Committee responsibilities. |
| 10. | Perform other activities related to this Charter as requested by the Board, or the Chairman of the Board. |
| 11. | Institute and oversee special investigations as needed. |
| 12. | Confirm annually that all responsibilities outlined in this Charter have been carried out. |
| 13. | Evaluate the Audit Committee’s and each member’s performance and qualifications under applicable rules and regulations on a regular basis. |
| B. | Financial Reporting Process |
| 1. | In consultation with the independent auditor and the chief audit executive, review the integrity of the Company’s financial reporting processes and the coordination of the internal audit function, if any, with the independent auditor. The Audit Committee shall report regularly to and review with the full Board any issues that arise with respect to the quality or integrity of the Company’s financial reporting, compliance with legal or regulatory requirements, the performance and independence of the independent auditor, or the performance of the internal audit function, if any. |
| 2. | Consider and approve, if appropriate, changes to the Company’s auditing and accounting principles and practices as suggested by the independent auditor, management, or the internal audit function, if any. |
| 3. | Ensure that there exist regular systems of reporting to the Audit Committee by each of management, the independent auditor and the chief audit executive regarding any significant judgments made in management’s preparation of the financial statements and any significant difficulties encountered during the course of the review or audit, including any restrictions on the scope of work or access to required information. |
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| 4. | Regularly review any significant disagreements among management and the independent auditor or the internal audit function, if any, in connection with the preparation of the financial statements. |
| 5. | Ensure and oversee timely reports from the independent auditor to the Audit Committee of (a) all critical accounting policies and practices; (b) all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management officials of the Company, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and (c) other material written communications between the independent auditor and the management of the Company, such as any management letter or schedule of unadjusted differences. |
| C. | Financial Statements |
| 1. | Review significant accounting and reporting issues, including complex or unusual transactions (such as off-balance sheet structures, if any) and highly judgmental areas, and recent professional and regulatory pronouncements, and understand their impact on the financial statements. |
| 2. | Review with management and the independent auditor the results of the audit, including any difficulties encountered and any significant changes in the audit plan. |
| 3. | Review the annual audited financial statements, consider whether they are complete, consistent with information known to the Audit Committee members and reflect appropriate accounting principles; and, following consultation with management and the independent auditor, consider whether to formally recommend to the Board that they be included in the Form 10-K. |
| 4. | Review other financial or risk-related sections of the annual report and related regulatory filings before release and consider the accuracy and completeness of the information. |
| 5. | Review with management and the independent auditor all matters required to be communicated to the Audit Committee under generally accepted auditing standards. |
| 6. | Understand how management and the internal audit function, if any, prepare interim financial statements, and the degree of involvement of the independent auditor in the review process. |
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| 7. | Review interim financial statements with management and the independent auditor before filing with regulators, and consider whether financial statements are complete and consistent with the information known to the Audit Committee members. |
| D. | Internal Controls |
| 1. | Understand how the internal audit function, if any, has implemented and maintains the Company’s internal controls and the process for the independent auditor’s review of the internal controls. Obtain reports on significant findings and recommendations regarding effectiveness of the controls, together with management’s responses. |
| 2. | Consider and review with the independent auditor the effectiveness of the Company’s internal control system, including information technology security and control. |
| 3. | Review management’s annual internal control report which acknowledges management’s responsibility for establishing and maintaining an adequate internal control structure and procedures for financial reporting; and contains an assessment of the effectiveness of the internal control structure. |
| E. | Internal Audit |
| 1. | Review with management and the chief audit executive the charter, plans, activities, staffing, and organizational structure of the internal audit function, if any. |
| 2. | Ensure there are no unjustified restrictions or limitations, and review and concur in the appointment, replacement, or dismissal of the chief audit executive. |
| 3. | Review the effectiveness of the internal audit function. |
| 4. | On a regular basis, meet separately with the chief audit executive to discuss any matters that the Audit Committee or the chief audit executive believes should be discussed privately. |
| F. | Independent Auditor |
| 1. | Review the independent auditor’s proposed scope and approach for the audit, including coordination with the internal audit function, if any. |
| 2. | To review and discuss with the Company’s independent auditors (a) the auditors’ responsibilities under generally accepted auditing standards and the responsibilities of management in the audit process; (b) the overall audit strategy; (c) the scope and timing of the annual audit; (d) any significant risks identified during the auditors’ risk assessment procedures; and (e) when completed, the results, including significant findings, of the annual audit. |
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| 3. | To review and discuss with the Company’s independent auditors (a) all critical accounting policies and practices to be used in the audit; (b) all alternative treatments of financial information within generally accepted accounting principles, or GAAP, that have been discussed with management, the ramifications of the use of such alternative treatments and the treatment preferred by the auditors; and (c) other material written communications between the auditors and management. |
| 4. | To review with management and the Company’s independent auditors: any major issues regarding accounting principles and financial statement presentation, including any significant changes in the Company’s selection or application of accounting principles; any significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including the effects of alternative GAAP methods; and the effect of regulatory and accounting initiatives and off-balance sheet structures on the Company’s financial statements. |
| 5. | To keep the Company’s independent auditors informed of the Audit Committee’s understanding of the Company’s relationships and transactions with related parties that are significant to the Company; and to review and discuss with the Company’s independent auditors the auditors’ evaluation of the Company’s identification of, accounting for, and disclosure of its relationships and transactions with related parties, including any significant matters arising from the audit regarding the Company’s relationships and transactions with related parties. |
| 6. | To review with management, and the Company’s independent auditors the adequacy and effectiveness of the Company’s internal controls, including any significant deficiencies or material weaknesses in the design or operation of, and any material changes in, the Company’s internal controls and any special audit steps adopted in light of any material control deficiencies, and any fraud involving management or other employees with a significant role in such internal controls, and review and discuss with management and the Company’s independent auditors disclosure relating to the Company’s internal controls, and the independent auditors’ report on the effectiveness of the Company’s internal control over financial reporting and the required management certifications to be included in or attached as exhibits to the Form 10-K or Form 10-Q reports, as applicable. |
| 7. | To review and discuss with the Company’s independent auditors any other matters required to be discussed by applicable auditing standards, including, without limitation, the auditors’ evaluation of the quality of the Company’s financial reporting, information relating to significant unusual transactions and the business rationale for such transactions and the auditors’ evaluation of the Company’s ability to continue as a going concern. |
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| 8. | To review and discuss with the Company’s independent auditors and management the Company’s annual audited financial statements (including the related notes), the form of audit opinion to be issued by the auditors on the financial statements and the disclosure under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to be included in the Form 10-K before the Form 10-K is filed. |
| 9. | Review the performance of the independent auditor, and exercise final approval on the appointment or discharge of the independent auditor. The Audit Committee has the sole authority and responsibility to select, evaluate, and where appropriate, replace the independent auditor. The independent auditor is ultimately accountable to the Audit Committee for such auditor’s review of the financial statements and internal controls of the Company. The Audit Committee shall also exercise final approval on the compensation of the independent auditor. |
| 10. | To approve all audit engagement fees and terms; and to pre-approve all audit and permitted non-audit and tax services that may be provided by the Company’s independent auditors or other registered public accounting firms, and establish policies and procedures for the Committee’s pre-approval of permitted services by the Company’s independent auditors or other registered public accounting firms on an on-going basis. The Audit Committee may delegate, to one or more designated members of the Audit Committee, the authority to grant such pre-approvals. The decisions of any member to whom such authority is delegated shall be presented to the full Audit Committee at each of its scheduled meetings. |
| 11. | At least annually, to obtain and review a report by the Company’s independent auditors that describes (a) the accounting firm’s internal quality control procedures; (b) any material issues raised by the most recent internal quality control review, peer review or Public Company Accounting Oversight Board review or inspection of the firm or by any other inquiry or investigation by governmental or professional authorities in the past five (5) years regarding one or more audits carried out by the firm and any steps taken to deal with any such issues: and (c) all relationships between the firm and the Company or any of its subsidiaries; and to discuss with the independent auditors this report and any relationships or services that may impact the objectivity and independence of the auditors. |
| 12. | Review and ensure the independence of the independent auditor by: |
| ● | receiving from, and reviewing and discussing with, the independent auditor, on a periodic basis, a formal written statement delineating all relationships between the independent auditor and the Company consistent with the applicable requirements of the Public Company Accounting Oversight Board; |
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| ● | reviewing, and actively discussing with the Board, if necessary, and the independent auditor, on a periodic basis, any disclosed relationships or services, including non-audit services, between the independent auditor and the Company or any other disclosed relationships or services that may impact the objectivity and independence of the independent auditor; |
| ● | recommending, if necessary, that the Board take appropriate action to satisfy itself of the independent auditor’s independence; and |
| ● | ensuring that the lead or coordinating audit partner having primary responsibility for the audit, or the audit partner responsible for reviewing the audit does not perform audit services for the Company for more than five (5) consecutive fiscal years. |
| 13. | Set clear policies for the hiring by the Company or any Subsidiary of employees or former employees of the independent auditor. |
| 14. | On a regular basis, meet separately with the independent auditor to discuss any matters that the Audit Committee or independent auditor believes should be discussed privately. |
| G. | Approval of Related Person Transactions |
| 1. | Review and approve, prior to the Company’s entry into any such transactions, all transactions in which the Company is or will be a participant, which would be reportable by the Company under Item 404 of Regulation S-K promulgated under the Securities Act as a result of any of the following persons having or expected to have a direct or indirect material interest (a “Related Person Transaction”): |
| ● | executive officers of the Company; |
| ● | members of the Board; |
| ● | beneficial holders of more than 5% of the Company’s securities; |
| ● | immediate family members of any of the foregoing persons; and |
| ● | any other persons whom the Board determines may be considered to be related persons as defined by Item 404 of Regulation S-K promulgated under the Securities Act. |
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| 2. | In reviewing and approving such transactions, the Audit Committee shall obtain, or shall direct management to obtain on its behalf, all information that the Audit Committee believes to be relevant and important to a review of the transaction prior to its approval. Following receipt of the necessary information, a discussion shall be held of the relevant factors if deemed to be necessary by the Audit Committee prior to approval. If a discussion is not deemed to be necessary, approval may be given by written consent of the Audit Committee. This approval authority may also be delegated to the Chairperson in some circumstances. No Related Person Transaction shall be entered into prior to the completion of these procedures. |
| 3. | The Audit Committee or the Chairperson, as the case may be, shall approve only those Related Person Transactions that are determined to be in, or not inconsistent with, the best interests of the Company and its shareholders, taking into account all available facts and circumstances as the Audit Committee or the Chairperson determines in good faith to be necessary in accordance with principles of Florida law generally applicable to directors of a Florida corporation. No member of the Audit Committee shall participate in any review, consideration or approval of any Related Person Transaction with respect to which the member or any of his or her immediate family members has an interest. |
| 4. | The Audit Committee shall adopt any further policies and procedures relating to the approval of Related Person Transactions that it deems necessary or advisable from time to time. |
| H. | Risk Oversight/General |
| 1. | Discuss with management and the independent auditor, at least annually, policies and programs with respect to enterprise risks, including risk management, risk assessment and inquiries about risks or exposures facing the Company. |
| 2. | Review, with the Company’s counsel, any legal or regulatory matter that could have a significant impact on the Company’s financial statements. |
| 3. | Review and approve the Company’s investment policies. |
| 4. | Review the adequacy of the Company’s insurance coverage. |
| 5. | Review the status of any material tax audits and proceedings, the Company’s tax strategy and other material tax matters. |
| 6. | Maintain minutes or other records of meetings and activities of the Audit Committee. |
| 7. | Request any officer or employee of the Company (or any Subsidiary) or the Company’s outside counsel or independent auditor to attend a meeting of the Audit Committee or to meet with any members of, or advisors or consultants to, the Audit Committee. |
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| 8. | Establish procedures for (a) the receipt, retention, and treatment of complaints received by the Company from external parties regarding accounting, internal accounting controls, or auditing matters; and (b) the confidential, anonymous submission by employees of the Company or any Subsidiary of concerns regarding questionable accounting or auditing matters, whether through the whistleblower hotline or other reporting channels. Ensure such procedures maintain the confidentiality and anonymity of persons reporting violations or suspected violations and ensure that the Company does not take retaliatory actions against those reporting. |
| 9. | Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management’s investigation and follow-up (including disciplinary action) of any instances of noncompliance. |
| 10. | Review the findings of any examinations by regulatory agencies, and any auditor observations. |
| 11. | Review the process for communicating the code of conduct to the Company’s personnel, and for monitoring compliance therewith, including the establishment of procedures to ensure open and regular communications with the Audit Committee. |
| 12. | Obtain regular updates from management and the Company’s legal counsel regarding compliance matters. |
| 13. | Review with management the policies and procedures with respect to officers’ expense accounts and perquisites. |
| 14. | Perform any other activities consistent with this Charter, the Company’s by-laws, and governing law, as the Audit Committee or the Board deems necessary or appropriate. |
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V. COMPENSATION
Audit Committee members shall be compensated by the Company solely in the form of directors’ fees. Audit Committee members may, however, receive greater fees than those received for Board service by other Board members, in light of their additional responsibilities to the Company.
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Exhibit 99.2
COMPENSATION COMMITTEE CHARTER
OF
SS INNOVATIONS INTERNATIONAL, INC.
Effective as of January 1, 2025
I. PURPOSE
The purpose of the Compensation Committee of the board of directors (the “Board”) of SS Innovations International, Inc. (the “Company”) is:
| 1. | To discharge the responsibilities of the Board relating to compensation of the Company’s directors and executive officers; |
| 2. | To assist the Board in establishing appropriate incentive compensation and equity-based plans and to administer such plans; and |
| 3. | To oversee the annual process of evaluation of the performance of the Company’s management; and |
| 4. | To perform such other duties and responsibilities as enumerated in and consistent with this Charter. |
II. MEMBERSHIP AND PROCEDURES
| A. | Membership and Appointment |
The Compensation Committee shall be comprised of not fewer than two (2) members of the Board, as shall be determined from time to time by the Board. The members of the Compensation Committee shall be elected by the Board, or the Nominating and Corporate Governance Committee of the Board or the Nominating and Corporate Governance Committee, as applicable, and shall hold office until their resignation or removal or until their successors shall be duly elected and qualified.
All members of the Compensation Committee shall qualify as “independent directors” for purposes of the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”), as such standards may be changed from time to time. In addition to the general independence standard required for membership on the Compensation Committee, the Board must consider all factors specifically relevant to determining whether the director has a relationship to the Company which is material to that director’s ability to be independent from management in connection with the duties of a Compensation Committee member, including but not limited to (i) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the Company to the director: and (ii) whether the director is affiliated with the Company, any of its subsidiaries or an affiliate of a subsidiary. To the extent that the Board deems practicable and advisable, all members of the Compensation Committee shall also qualify as “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); provided, however, that notwithstanding anything contained herein to the contrary, if not all members of the Compensation Committee qualify as non-employee directors, any grant of equity compensation to officers and directors (as defined by Rule 16a-1(f) of the Exchange Act) shall be made by the full Board or a subcommittee of the Compensation Committee comprised of at least two (2) members who qualify as non-employee directors.
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| B. | Removal |
The entire Compensation Committee or any individual Compensation Committee member may be removed without cause by the affirmative vote of a majority of the Board. Any Compensation Committee member may resign effective upon delivery of oral or written notice to the Chairman of the Board, the Secretary of the Company, or the Board (unless the notice specifies a later time for the effectiveness of such resignation). The Board may elect a successor to assume the available position on the Compensation Committee when the resignation becomes effective.
| C. | Chairperson |
A chairperson of the Compensation Committee (the “Chairperson”) may be designated by the Board. In the absence of such designation, the members of the Compensation Committee may designate the Chairperson by majority vote of the full Compensation Committee membership. The Chairperson shall determine the agenda for and the length of meetings and shall have unlimited access to management and to information relating to the Compensation Committee’s purposes. The Chairperson shall establish such other rules as may from time to time be necessary and proper for the conduct of the business of the Compensation Committee.
| D. | Meetings, Minutes and Reporting |
The Compensation Committee shall meet at least two times per year and at such other times as it deems necessary to carry out its responsibilities. All Compensation Committee members are expected to attend each meeting, in person or via video-conference or other electronic methods of communication. The Compensation Committee may also act by unanimous written consent in lieu of a meeting.
The Compensation Committee shall keep full and complete minutes of the proceedings of the Compensation Committee. In addition to the specific matters set forth herein requiring reports by the Compensation Committee to the full Board, the Compensation Committee shall report such other significant matters as it deems necessary concerning its activities to the full Board. The Compensation Committee may appoint a Secretary whose duties and responsibilities shall be to keep records of the proceedings of the Compensation Committee for the purposes of reporting Compensation Committee activities to the Board and to perform all other duties as may from time to time be assigned to him or her by the Compensation Committee, or otherwise at the direction of a Compensation Committee member. The Secretary need not be a member of the Compensation Committee or a director and shall have no membership or voting rights by virtue of the position.
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| E. | Delegation |
The Compensation Committee may, by resolution passed by a majority of the Compensation Committee members, designate one or more subcommittees, each subcommittee to consist of at least two members of the Compensation Committee. Any such subcommittee, to the extent provided in the resolutions of the Compensation Committee and to the extent not limited by applicable law, shall have and may exercise all the powers and authority of the Compensation Committee. Each subcommittee shall have such name as may be determined from time to time by resolution adopted by the Compensation Committee. Each subcommittee shall keep regular minutes of its meetings and report the same to the Compensation Committee or the Board when required.
| F. | Authority to Retain Advisors |
The Compensation Committee shall have authority to retain or obtain the advice of such compensation consultants, legal counsel, experts and other advisors as the Compensation Committee may deem appropriate in its sole discretion. The Compensation Committee shall be directly responsible for the appointment, compensation and oversight of its consultants, legal counsel, experts and advisors and shall have sole authority to approve their fees and retention terms, and the Company shall provide funding for such fees and related expenses.
Before selecting any such consultant, legal counsel, expert or advisor, the Compensation Committee shall consider the following independence factors:
| ● | The provision of other services to the Company by the entity that employs the consultant, legal counsel, expert or advisor (the “Employing Firm”). |
| ● | The amount of fees received from the Company by the Employing Firm, as a percentage of the total revenue of the Employing Firm. |
| ● | The policies and procedures of the Employing Firm that are designed to prevent conflicts of interest. |
| ● | Any business or personal relationship of the consultant, legal counsel, expert or advisor with a member of the Compensation Committee. |
| ● | Any business or personal relationship of the consultant, legal counsel, expert, advisor or Employing Firm with an executive officer of the Company. |
| ● | Any stock of the Company owned by the consultant, legal counsel, expert or advisor. |
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III. DUTIES AND RESPONSIBILITIES
The following shall be recurring duties and responsibilities of the Compensation Committee in carrying out its purposes. These duties and responsibilities are set forth below as a guide to the Compensation Committee, with the understanding that the Compensation Committee may alter or supplement them as appropriate under the circumstances, to the extent permitted by applicable laws, rules and regulations.
| 1. | Establish a compensation policy for executive officers designed to (a) enhance the profitability of the Company and increase shareholder value; (b) reward executive officers for their contribution to the Company’s growth and profitability; (c) recognize individual initiative, leadership, achievement, and other contributions; and (d) provide competitive compensation that will attract and retain qualified executives. |
| 2. | Subject to variation where appropriate, the compensation policy for executive officers shall include (a) base salary, which shall be set on an annual or other periodic basis; (b) annual or other time or project based incentive compensation, which shall be awarded for the achievement of predetermined financial, project, research or other designated objectives of the Company as a whole and of the executive officers individually; and (c) long-term incentive compensation in the forms of equity participation and other awards with the goal of aligning, where appropriate, the long-term interests of executive officers with those of the Company’s shareholders and otherwise encouraging the achievement of superior results over an extended time period. |
| 3. | Review competitive practices and trends to determine the adequacy of the executive compensation program. |
| 4. | Review and consider participation and eligibility in the various components of the total executive compensation package. |
| 5. | Annually review and recommend to the Board corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals and objectives, and recommend to the Board the CEO’s compensation levels based on this evaluation; the CEO may not be present during any deliberations or voting with respect to the CEO’s compensation. |
| 6. | Annually review and approve compensation of executive officers of the Company other than the CEO. |
| 7. | Annually review and approve compensation of directors of the Company, including with respect to any equity based plan. |
| 8. | As deemed necessary or appropriate, approve employment contracts, severance arrangements, change in control provisions and other agreements. |
| 9. | Approve and administer cash incentives and deferred compensation plans for executive officers (including any modification to such plans) and oversight of performance objectives and funding for executive incentive plans. |
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| 10. | Approve and oversee reimbursement policies for directors and executive officers. |
| 11. | Periodically review and make recommendations to the Board with respect to equity based plans that are subject to approval by the Board. The Compensation Committee shall oversee the Company’s compliance with the requirement under Nasdaq rules that, with limited exceptions, shareholders approve equity compensation plans. Subject to such shareholder approval, or as otherwise required by the Exchange Act, or other applicable law, the Compensation Committee shall have the power to manage all equity based plans. |
| 12. | If the Company is required by applicable Securities and Exchange Commission (“SEC”) rules to include a Compensation Discussion and Analysis (“CD&A”) in its SEC filings, review the CD&A prepared by management, discuss the CD&A with management and, based on such review and discussions, recommend to the Board that the CD&A be included in the Company’s Annual Report on Form 10-K, proxy statement, or any other applicable filing as required by the SEC. |
| 13. | Review all compensation policies and practices for all employees to determine whether such policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. |
| 14. | Recommend to the Board that the shareholders of the Company approve, on an advisory basis, the compensation of the named executive officers of the Company, as disclosed in the Company’s proxy statement, if such proposal will be contained in the Company’s proxy statement. |
| 15. | Recommend to the Board the frequency of holding a vote on the compensation of the Company’s named executive officers, if such proposal will be contained in the Company’s proxy statement. |
| 16. | Periodically review executive supplementary benefits and, as appropriate, the organization’s retirement, benefit, and special compensation programs involving significant cost. |
| 17. | Make regular reports to the Board. |
| 18. | Annually review and reassess the adequacy of this Charter and recommend any proposed changes to the Board for approval. |
| 19. | Annually evaluate its own performance. |
| 20. | Oversee the annual process of performance evaluations of the Company’s management. |
| 21. | Fulfill such other duties and responsibilities as may be assigned to the Compensation Committee, from time to time, by the Board and/or the Chairman of the Board. |
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Exhibit 99.3
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER
OF
SS INNOVATIONS INTERNATIONAL, INC.
Effective as of January 1, 2025
I. PURPOSE
The Nominating and Corporate Governance Committee (the “Nominating Committee”) is appointed by the board of directors (the “Board”) of SS Innovations International, Inc. (the “Company”): (a) to assist the Board by identifying qualified candidates for director, and to recommend to the Board the director nominees for the next annual meeting of shareholders; (b) to lead the Board in its annual review of the Board’s performance; (c) to recommend to the Board director nominees for each Board committee; and (d) develop and recommend to the Board corporate governance guidelines applicable to the Company.
II. MEMBERSHIP AND PROCEDURES
A. Membership and Appointment
To assist in carrying out its duties, the Nominating Committee shall have sole authority to retain and terminate any search firm to be used to identify candidates to serve as a director, including sole authority to approve the search firm’s fees and other retention terms. In addition, the Nominating Committee shall have authority to obtain advice and assistance from internal or external legal, accounting or other advisors.
The Nominating Committee shall be comprised of not fewer than two (2) members of the Board, as shall be determined from time to time by the Board. The members of the Nominating Committee shall be elected by the Board at the annual organizational meeting of the Board and shall hold office until their resignation or removal or until their successors shall be duly elected and qualified.
All members of the Nominating Committee shall qualify as “independent directors” for purposes of the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”), as such standards may be changed from time to time.
B. Removal
The entire Nominating Committee or any individual Nominating Committee member may be removed with or without cause by the affirmative vote of a majority of the Board. Any Nominating Committee member may resign effective upon giving oral or written notice to the Chairman of the Board, the Secretary of the Company, or the Board (unless the notice specifies a later time for the effectiveness of such resignation). The Board may elect a successor to assume the available position on the Nominating Committee when the resignation becomes effective.
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C. Chairperson
A chairperson of the Nominating Committee (the “Chairperson”) may be designated by the Board. In the absence of such designation, the members of the Nominating Committee may designate the Chairperson by majority vote of the full Nominating Committee membership. The Chairperson shall determine the agenda for and the length of meetings and shall have unlimited access to management and to information relating to the Nominating Committee’s purposes. The Chairperson shall establish such other rules as may from time to time be necessary and proper for the conduct of the business of the Nominating Committee.
D. Meetings, Minutes and Reporting
The Nominating Committee shall meet at least two (2) times per year, or more frequently as circumstances dictate. All Nominating Committee members are expected to attend each meeting, in person or via video-conference or other electronic methods of communication. The Nominating Committee may also act by unanimous written consent in lieu of a meeting.
The Nominating Committee shall keep minutes of the proceedings of the Nominating Committee. In addition to the specific matters set forth herein requiring reports by the Nominating Committee to the full Board, the Nominating Committee shall report such other significant matters as it deems necessary concerning its activities to the full Board. The Nominating Committee may appoint a Secretary whose duties and responsibilities shall be to keep records of the proceedings of the Nominating Committee for the purposes of reporting Nominating Committee activities to the Board and to perform all other duties as may from time to time be assigned to him or her by the Nominating Committee, or otherwise at the direction of a Nominating Committee member. The Secretary need not be a member of the Nominating Committee or a director and shall have no membership or voting rights by virtue of the position.
E. Delegation
The Nominating Committee may, by resolution passed by a majority of the Nominating Committee members, designate one or more subcommittees, each subcommittee to consist of one or more members of the Nominating Committee. Any such subcommittee, to the extent provided in the resolutions of the Nominating Committee and to the extent not limited by applicable law, shall have and may exercise all the powers and authority of the Nominating Committee. Each subcommittee shall have such name as may be determined from time to time by resolution adopted by the Nominating Committee. Each subcommittee shall keep regular minutes of its meetings and report the same to the Nominating Committee or the Board when required.
F. Authority to Retain Advisors
In the course of its duties, the Nominating Committee shall have the authority, at the Company’s expense and without needing to seek approval for the retention of such advisors or consultants from the Board, to retain and terminate consultants (including search firms to be used to identify candidates to serve as directors), legal counsel, or other advisors, as the Nominating Committee deems advisable, including the sole authority to approve any such advisors’ fees and other retention terms.
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III. DUTIES AND RESPONSIBILITIES
The following shall be recurring duties and responsibilities of the Nominating Committee in carrying out its purposes. These duties and responsibilities are set forth below as a guide to the Nominating Committee, with the understanding that the Nominating Committee may alter or supplement them as appropriate under the circumstances, to the extent permitted by applicable law.
1. Evaluate the current composition, organization and governance of the Board and its committees, and make recommendations to the Board for approval.
2. Annually review for each director and nominee, the particular experience, qualifications, attributes or skills that contribute to the Board’s conclusion that the person should serve or continue to serve as a director for the Company, as well as how the directors’ skills and background enable them to function well together as a Board.
3. Determine desired Board member skills and attributes and conduct searches for prospective directors whose skills and attributes reflect those desired. Evaluate and propose nominees for election to the Board. At a minimum, nominees for service on the Board must meet the threshold requirements set forth in the Nominating and Corporate Governance Nominating Committee Policy Regarding Qualifications of Directors attached as Appendix A hereto. Each nominee will be considered both on his or her individual merits and in relation to existing or other potential members of the Board, with a view to establishing a well-rounded, diverse, knowledgeable, and experienced Board.
4. Administer the annual Board performance evaluation process, including conducting surveys of director observations, suggestions and preferences.
5. Evaluate and make recommendations to the Board concerning the appointment of directors to Board committees, the selection of Board committee chairs, and proposal of the slate of directors for election to the Board.
6. Consider bona fide candidates recommended by shareholders for nomination for election to the Board in accordance with the Company’s Bylaws.
7. As necessary in the Nominating Committee’s judgment from time to time, retain and compensate third party search firms to assist in identifying or evaluating potential nominees to the Board.
8. Evaluate and recommend termination of membership of individual directors in accordance with the Board’s governance principles, for cause or for other appropriate reasons.
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9. Oversee the process of succession planning for the Chief Executive Officer and, as warranted, other senior officers of the Company.
10. Develop, adopt and oversee the implementation of a Code of Business Conduct and Ethics for all directors, executive officers and employees of the Company.
11. Review and maintain oversight of matters relating to the independence of Board and Nominating Committee members, keeping in mind the independence standards of the Sarbanes-Oxley Act of 2002 and Nasdaq rules.
12. Oversee and assess the effectiveness of the relationship between the Board and Company management.
13. Form and delegate authority to subcommittees when appropriate, each subcommittee to consist of one or more members of the Nominating Committee. Any such subcommittee, to the extent provided in the resolutions of the Nominating Committee and to the extent not limited by applicable law, shall have and may exercise all the powers and authority of the Nominating Committee.
14. Make regular reports to the Board concerning its activities.
15. Annually review and reassess the adequacy of this Charter and the appendices hereto and recommend any proposed changes to the Board for approval.
16. Annually evaluate its own performance.
17. Maintain appropriate records regarding its process of identifying and evaluating candidates for election to the Board.
18. Fulfill such other duties and responsibilities as may be assigned to the Nominating Committee, from time to time, by the Board and/or the Chairman of the Board.
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APPENDIX A
Nominating and Corporate Governance Nominating Committee Policy Regarding Qualifications of Directors
The Nominating and Corporate Governance Nominating Committee (the “Nominating Committee”) of SS Innovations International, Inc. (the “Company”) believes that members of the Company’s Board of Directors (the “Board”) must possess certain basic personal and professional qualities in order to properly discharge their fiduciary duties to shareholders, provide effective oversight of the management of the Company and monitor the Company’s adherence to principles of sound corporate governance. It is therefore the policy of the Nominating Committee that all persons nominated to serve as a director of the Company should possess the minimum qualifications described in this Policy. These are only threshold criteria, however, and the Nominating Committee will also consider the contributions that a candidate can be expected to make to the collective functioning of the Board based upon the totality of the candidate’s credentials, experience and expertise, the composition of the Board at the time, and other relevant circumstances. This Policy may be modified by the Nominating Committee from time to time.
1. Integrity and Ethical Values. Candidates should possess the highest personal and professional standards of integrity and ethical values.
2. Commitment. Candidates must be committed to promoting and enhancing the long-term value of the Company for its shareholders.
3. Absence of Conflicts of Interest. Candidates should not have any interests that would materially impair his or her ability to (a) exercise independent judgment; or (ii) otherwise discharge the fiduciary duties owed as a director to the Company and its shareholders.
4. Fair and Equal Representation. Candidates must be able to represent fairly and equally all shareholders of the Company without favoring or advancing any particular shareholder or other constituency of the Company.
5. Achievement. Candidates must have demonstrated achievement in one or more fields of business, professional, governmental, community, scientific or educational endeavor, and possess mature and objective business judgment and expertise.
6. Oversight. Candidates are expected to have sound judgment, derived from management or policy-making experience (which may be as an advisor or consultant), that demonstrates an ability to function effectively in an oversight role.
7. Diversity. The Nominating Committee will consider issues of diversity among its members in identifying and considering nominees for director, and will strive where appropriate to achieve a diverse balance of backgrounds, perspectives, experience, age, gender, ethnicity and country of citizenship on the Board and its Nominating Committees.
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8. Business Understanding. Candidates must have a general appreciation regarding major issues facing public companies of a size and operational scope similar to the Company. These include:
| ● | contemporary governance concerns; |
| ● | regulatory obligations of a public issuer; |
| ● | strategic business planning; |
| ● | competition in a global economy; and |
| ● | basic concepts of corporate accounting and finance. |
9. Available Time. Candidates must have, and be prepared to devote, adequate time to the Board and its Nominating Committees. It is expected that each candidate will be able to arrange their business and professional commitments, including service on the boards of other companies and organizations, so that they are available to attend the meetings of the Company’s Board and any Nominating Committees on which they serve, as well as the Company’s annual meeting of shareholders.
10. Board Policies. The candidate’s election must not conflict with any applicable Board policies.
11. Limited Exceptions. Under exceptional and limited circumstances, the Nominating Committee may approve the candidacy of a nominee who does not satisfy all of these requirements if it believes the service of such nominee is in the best interests of the Company and its shareholders.
12. Additional Qualifications. In approving candidates to be recommended for election as director, the Nominating Committee will also assure that:
| ● | at least a majority of the directors serving at any time on the Board are independent, as defined under Nasdaq rules; |
| ● | at least three of the directors satisfy the financial literacy requirements required for service on the audit Nominating Committee under Nasdaq rules; |
| ● | at least one of the directors qualifies as an “audit committee financial expert” under the rules of the Securities and Exchange Commission; and |
| ● | the independent directors should have general familiarity with an industry or industries in which the Company conducts a substantial portion of its business or in related industries. |
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