SS Innovations International, Inc. - Annual Report: 2021 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15 (d) OF THE

SECURITIES AND EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

Commission file number: 333-216054

AVRA MEDICAL ROBOTICS, INC

(Exact name of registrant as specified in its charter)

3259 Progress Drive, Suite 114, Orlando, FL 32826  

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (407) 956-2250

Securities registered under Section 12(b) of the Act:

Securities registered under Section 12(g) of the Act:

None 

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity as of the last business day of the registrant’s most recently completed second fiscal quarter: Not applicable.

The number of shares outstanding of the issuer’s common stock, $0.0001 par value, as of November 1, 2022, was 39,197,099 shares.

DOCUMENTS INCORPORATED BY REFERENCE: No documents are incorporated by reference into this Report except those Exhibits so incorporated as set forth in the Exhibit index.

TABLE OF CONTENTS

FORWARD LOOKING STATEMENTS

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein particularly in view of the current state of our operations, the inclusion of such information should not be regarded as a statement by us or any other person that our objectives and plans will be achieved. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the factors set forth herein under the headings “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Unless the context otherwise requires, references in this report to “AVRA,” “the Company,” “we,” “us” and “our” refer to Avra Medical Robotics, Inc.

PART I

Item 1 Business.

Overview

We are a medical robotics company developing a fully autonomous medical robotic system using proprietary software which integrates Artificial Intelligence (“AI”) and Deep Learning, or machine learning, (“DL”). By using an AI and DL enhanced software program, we are creating an intelligent robotic system that we believe can “robotize” a wide range of medical procedures currently being performed by human hands. We are concentrating our research and development efforts to meet rising expectations of patients and practitioners alike for the precision, safety and speed offered by an AI enhanced robotics platform system that can be combined with proven medical devices, end-effectors and surgical instruments.

We believe that progress in mechanical and software engineering has made possible lightweight and relatively inexpensive robotic devices for difficult procedures in various medical fields. Medical robots are already being successfully employed in several areas of surgery, including Urology (Prostate), Colo-Rectal, Gynecology, Thoracic, General Surgery, Orthopedics, and Neuro and Spine Surgery. Robots are also being used for Telemedicine and assistive robotic methods are addressing the delivery of healthcare in inaccessible locations, ranging from rural areas lacking specialist expertise to post-disaster scenarios, and battlefield areas. With the aging population dominating demographics in the U.S. across all spectrums of healthcare, robotic technologies are being developed toward promoting improved function, lower morbidity and improved overall outcomes.

We are developing a treatment-independent autonomous robotics system utilizing our proprietary AI-driven precision guidance system, applicable to a variety of minimally and non-invasive procedures, with an initial focus on skin resurfacing aesthetic procedures utilizing several FDA approved skin enhancing techniques robotized for superior performance and optimal results. Our medical robotic system is being developed to deliver skin resurfacing treatments, such as micro-needling and laser therapies with improved efficiency, accuracy and precision over current procedures conducted by human hand, and only requiring the doctor to input or just confirm treatment parameters. As a result, use of our medical robotic system is expected to provide improved quality and safety as well as improve patient throughput and workflow.

Our autonomous medical robotics system is being developed to be compatible with available FDA approved surgical tools and end-effectors, enabling us to initially penetrate a sizable and fast-growing aesthetics market, which includes micro-needling and laser solutions. Our robotics system will allow doctors, and anyone permitted to treat patients, defined at the State level, such as a licensed aesthetician, to treat damaged skin autonomously by delivering, for example, micro-needling to the skin. The micro-needling catalyzes the natural process of collagen remodeling, consisting of formation of new collagen, elastin, and vascularization in the papillary dermis, similar to the effect of laser treatments.

We expect our robotic system to eliminate many of the common errors that occur during handheld procedures, such as over- or under- exposure of the needles or energy-based instruments that can have terrible cosmetic results and even injure the patient. In addition, our system is being designed to continuously adjust treatment parameters, such as penetration depth, time, and energy in order to individualize the outcome based on our algorithms. Our robotic system has been designed and developed through a seamless collaboration of the surgeon, the engineer and the scientist. Since the medical robotic industry has progressed greatly in miniaturization, adaptability and lower costs, we believe that the Avra “brains” technology component can lead to dramatic opportunities in all of medicine.

The advantages of robotizing already FDA approved aesthetic devices are many. In contrast to a human using a handheld device, our aesthetics robotic system has the potential to perform each and every procedure with unsurpassed precision without constraint of age, proficiency, experience or fatigue. Likewise, in many skin related treatments the amount of energy delivered, distance and/or depth of the instrument to, or into, the skin, and treating only the affected area are critical to the outcome. The robotic system can maintain these parameters with unparalleled accuracy. The system can also replicate the same procedure time and again precisely. Delivery of certain aesthetic treatments by robotic systems is believed to be the most efficient option, requiring fewer visits per patient while increasing patient throughput — a benefit for patients and practitioners alike.

Advantages of using our medical robotic approach to procedures include:

We believe that our initial medical robotic system for the aesthetics market should find rapid acceptance based on the aforementioned advantages of using the attribute of robotics versus traditional manual applications. Furthermore, there is general acceptance by consumers for fee-for-service cash payments in the facial aesthetics market thereby avoiding medical insurance reimbursement issues. Our medical robotic system utilizes a robotic arm that has 7-degrees of freedom integrated with our proprietary AI-driven control software and algorithms. The robotic arm was designed and built under the required medical device standards of the U.S. Food and Drug Administration (the “FDA”). Our strategy is to integrate the robotic arm with FDA approved devices, which is expected to allow for a more expedited approval of the integrated system. We believe that the FDA approval process will primarily focus upon validation of the medical robotic system’s software control. This could lead to a less onerous, more de-risked regulatory path to approval, particularly if strong preclinical results are achieved. Subsequent to the completion of the FDA preclinical work, estimated to take six months, we believe that we will be able to additionally modify and robotize certain non-invasive instruments that do not require FDA approvals and proceed to the cosmetic treatments marketplace. This action could sharply reduce the time to commercial operations and revenues.

We previously retained the services of The Horizon Phoenix Group (“HPG”), a consulting firm experienced in securing U.S. and foreign regulatory approvals for medical devices, in order to initiate the regulatory process. Working with HPG, we prepared and filed an application with the FDA for our initial medical robotic system and in August 2019 held an initial pre-collaboration meeting with the FDA. We believe that this is the first of a series of meetings where the Avra system and its regulatory requirements will be discussed in ever-increasing specificity. This should allow for a more focused regulatory process, saving both resources and time. The robotic arm that we intend to utilize for our system has already been granted approval in the EU and received a CE mark. We have begun implementing a quality and regulatory system that will serve as the foundation for U.S., Canadian, European, Australian, Japanese, and Brazilian market access for our medical robotic system. The Medical Device Single Audit Program(“MDSAP”), which we plan to employ, is a single inspection that, when completed, is expected to support market access to these six most important medical device marketplaces.

Since 2016, we had a research partnership with the University of Central Florida (“UCF”) to develop a prototype intelligent medical robotic system. UCF is recognized particularly for its work in the area of medical robotic research and design, with a focus on the guidance systems. Avra has paid UCF a one-time fee for outright ownership of work developed by UCF in the collaboration. The Research Agreement was extended several times and expired on April 30, 2021. To further the depth of our research and development we also began a partnership in 2021 with Florida Polytechnic University and are actively working with them on developing our system. Avra recently brought in two Associate Professors and three graduates to join Avra’s engineering development team. Effective October 11^th, 2021 Avra executed a Sponsored Student Project Agreement which includes two payments of $8,030 each covering Fall semester in 2021 and Spring semester in 2022.

Recent Developments

On August 5, 2022, AVRA entered into a non-binding letter of intent with Dr. Sudhir Srivastava (“Dr. Srivastava”), Cardio Ventures Pvt. Ltd., a Bahamian private limited company of which Dr. Srivastava is the sole stockholder(“Cardio”), Otto Pvt, Ltd., a Bahamian private limited company and direct subsidiary of Cardio (“Otto”) and Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company and indirect subsidiary of Cardio (“SSI,” and together with Cardio and Otto, the “SSI Parties”) with respect to a business combination between AVRA and the SSI Parties (the “Transaction”). SSI, based in Haryana, India is engaged in the development, commercialization, manufacturing and sale of medical and surgical robotic systems utilizing patents, trademarks and other intellectual property held by Dr. Srivastava (the “SSI Intellectual Property”).

If and when the transaction is consummated, the business of the SSI Parties, including the SSI Intellectual Property will be owned by AVRA. The shareholders of the SSI Parties will own 95% of the common stock of post-transaction AVRA and the current shareholders of AVRA will own 5% of the common stock of post-transaction AVRA. In addition, there will be changes in composition of the board of directors, implementation of corporate governance policies and changes in management, all with a view to listing the common stock of AVRA on the Nasdaq Stock Market, LLC or another National Securities Exchange. In addition, AVRA will change its name to “SS Innovations, Inc.”

Consummation of the Transaction is subject to, among other matters, the negotiation and execution of definitive agreements and documentation, containing, in addition to the above terms, terms and conditions customary for agreements of this type and nature, including, without limitation, representations, warranties, and indemnities of the parties.

Consummation of the Transaction is also subject to completion of a due diligence review by each party of the other, the results of which shall be satisfactory to the reviewing parties in their sole discretion.

Given the foregoing, there can be no assurance given that the Company will be able to successfully complete the Transaction.

In connection with executing the letter of intent, we advanced the SSI Parties, the amount of $990,000 (the “Interim Financing”). The Interim Financing is evidenced by two notes, one for $100,000 and one for $1,000,000. Both are one-year Automatically Convertible Notes made in favor of the Company by Cardio, Otto and Dr. Srivastava, jointly and severally (the “Cardio Notes”). Interest on the Cardio Notes shall accrue at the rate of 7% per annum, payable together with the principal amount at maturity. The Cardio Notes have an original issue discount of 10%. If the Cardio Notes are not repaid in full on or at maturity, they will automatically convert into a percentage equity interest in Cardio determined by dividing the principal amount of and accrued interest on the Cardio Notes divided by $100 million. The Cardio Notes contains customary default provisions and other typical terms and conditions.

We may make additional advances to the SSI Parties of up to an aggregate principal amount of $5,000,000 of Interim Financing, evidenced by additional Cardio Notes. These Cardio Notes will be substantially similar in form and substance to the first Cardio Note, provided, however, that Cardio Notes issued in excess of an aggregate principal amount of $2.000,000, will have an original issue discount of 6% as opposed to 10%, and the valuation for determining conversion will be $250 million as opposed to $100 million.

In order to fund the Interim Financing, the Company offered and sold to two accredited investors, $1,000,000 and $100,000 one-year convertible promissory notes (the “Convertible Notes”). The Convertible Notes will have the same interest rate and payment terms as the Cardio Notes and otherwise be substantially similar to the Cardio Notes, provided, however, that the Convertible Notes do not have an original issue discount. Further, upon consummation of the Transaction (if and when it is consummated) the Convertible Notes will automatically convert into a number of AVRA Shares determined by dividing the principal amount of the Convertible Notes by $100 million and multiplying such number expressed as a percentage by the number of AVRA Shares issued to Dr. Srivastava and the other shareholders of the SSI Parties (if any) upon closing of the Transaction. The Company may offer and sell up to an aggregate principal amount of $5,000,000 in Convertible Notes in order to fund the Interim Financing.

The Convertible Notes were issued in a private transaction pursuant to the exemptions from registration under the Section 4(a)2 of the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations promulgated thereunder.

Advantages of Our Senior Leadership Team

Our senior leadership team and advisory boards have broad and deep experience in clinical practice, medical research, innovation and development in the medical robotics field. We believe that our team, which has been active in the medical robotics field for many years, brings the necessary skills and experience to develop and commercialize intelligent medical robotic systems, as well as in marketing, supply chain management, and the implementation of all other aspects of our planned business operations.

We believe we can rapidly develop and commercialize its initial medical robotic system in the aesthetic skin resurfacing market because of the following advantages and progress made to date, including:

Medical Robotic and Skin Rejuvenation Markets

The United States is expected to see a shortage of nearly 122,000 physicians by 2032 as demand for physicians continues to grow faster than supply, according to new data published by the AAMC (Association of American Medical Colleges). This trend is unfortunately being seen in the rest of the world as well. The World Health Organization (“WHO”) estimates that there is a global shortage of 4.3 million physicians, nurses, and other health professionals. The shortage is often starkest in developing nations due to the limited numbers and capacity of medical schools in these countries.

One solution that is expected to mitigate this shortage will be the growing use of robotic systems for both their ability to be used remotely by the doctor (i.e. a doctor could, from a central location, cover anywhere in the world given proper connectivity), but also for their ability to increase the efficiency of existing practitioners. The ever-growing high cost of healthcare is also a driver for the growth in the use of robotic systems.

Advantages of using medical robotics include:

The concept of using a robot in surgical procedures became a practical reality in 2000, when the FDA approved the da Vinci® robotic system, introduced to the market by Intuitive Surgical, Inc. (“ISRG”). For years, ISRG was essentially the sole company manufacturing and marketing robotic devices for use in the rapidly emerging field of robotic assisted, minimally invasive surgery.

Today, the U.S. is the leader in robot-assisted surgery. However, other countries are fast followers, having already recognized both the need and the promise of such technologies. The development of surgical robotics is motivated by the desire to enhance the effectiveness of a procedure by coupling information to action in the operating room or interventional suite and transcend human physical limitations in performing surgery and other interventional procedures, while still affording human control over the procedure. Two decades after the first reported robot assisted surgical procedure, surgical robots are now being widely used in the operating room. According to Kenneth Research, the worldwide medical robotics market is projected to reach $11.36 billion by 2023, expanding at a compound annual growth rate (“CAGR”) of 12.6% during 2018–2023.

According to Kenneth Research, North America is currently the world’s largest market for medical robotics, holding an over 40% market share as of 2019, with significant growth expected in the coming years.

Growth in North America is driven by a few factors including the high rate of adoption of these new technologies and the growing demand for more precise, less invasive, and safer surgical methods. The overall growth of this industry is driven by the rising demand for these technologies, the growing and aging population, as well as increasing healthcare expenditures.

Due to the growth in robotics for medical applications over the last several years, the medical robotics space has seen increasing mergers and acquisitions activity and we expect this to continue for the foreseeable future. Some recent examples include:

Similar to growth in the use of medical robots in various procedures, the demand for skin rejuvenation procedures is also rapidly growing, which is a primary reason why we chose the skin rejuvenation market as our initial point of entry into the medical robotics field. According to a research letter published by Jama Network, in 2016, the total number of dermatology providers was 13,365 (10,845 dermatologists and 2,520 dermatology physician assistants). The global medical aesthetic market is expected to reach $16.7 billion by 2022, with North America remaining the largest single market.

According to the National Laser Institute, between 2000 and 2018, the total number of non-surgical cosmetic treatments performed increased by 228% with 15.9 million non-surgical cosmetic treatments performed in 2018. The National Laser Institute also estimated that over $16.5 billion was spent in the U.S. on cosmetic procedures in 2018.

According to a research study by Persistence Market Research, the global market for skin rejuvenation is projected to reach a CAGR of 8.7%. By region, the North American and Asian Pacific excluding Japan (“APEJ”) regions reflect high potential in the years to come. The North American region is expected to dominate the global market as it is estimated to be the largest and highly attractive for skin rejuvenation. The North American skin rejuvenation market is estimated to reach a CAGR of 9.4% at its peak.

Most products designed to improve the appearance of the skin do not repair the skin itself; rather, they cover and hide scarring and blemishes temporarily. Wrinkles also are challenging as the skin ages and are hard to cover over. Some current treatments aim to slow or forestall the development of wrinkles, but with questionable effectiveness. Micro-needling and laser treatments are two common ablative procedures currently in use today for skin resurfacing, specifically focused on tone, texture and skin tightening. Other platforms include radiofrequency, ultrasound, cryolipolysis, and a multitude of laser frequencies that are available to practitioners.

Micro-needling is used to treat and improve conditions like acne scarring, fine lines and wrinkles, loose skin, skin texture, pore size, brown spots, stretch marks, and pigment issues. It is also called skin needling, collagen induction therapy (“CIT”), and percutaneous collagen induction (“PCI”). Most anyone can have the procedure performed, as long as they do not have any active infections, lesions, or any known wound healing problems.

Micro-needling is typically performed in a series of four to six sessions, spaced about a month apart. During the procedure, a topical anesthetic is applied, and then stainless-steel micro-needles are inserted into the skin to cause microinjuries or punctures. The damage caused by the needles encourages the body to send healing agents (elastin and collagen) to the punctures to repair them. According to a 2008 study, skin treated with four micro-needling sessions spaced one month apart produced up to a 400% increase in collagen and elastin six months after completing treatment.

Laser resurfacing also can shrink wrinkles, even eliminating small wrinkles, by removing the outer layer of skin, allowing new skin to form. While simple, this procedure can be painful. Laser resurfacing works by burning off skin; skin can reach 1500°F (800°C) in the process of being removed, and adjacent areas of skin can approach 400°F. Unsurprisingly, general anesthesia is often required. Open wounds are created and healing may take up to three weeks. Skin redness may persist for three months, during which the skin is particularly sensitive to UV light. Other risks of laser resurfacing include scarring, changes in skin pigmentation and bacterial infection. Most, if not all, of the more severe adverse effects of laser resurfacing treatments are due to errors in the application of the treatment. Applying the laser too close to the skin, for too long on one area of the skin, and at the wrong settings, are just some examples of human errors for this procedure. Robotizing this procedure could reduce, if not eliminate, these human errors.

A recent study by Yongsoo Lee, M.D., co-CEO and co-founder, Oh and Lee Medical Robot, Inc., in South Korea, presented at the American Society for Laser Medicine and Surgery meeting held in April 2017, comparing the improvements in the evenness of laser irradiation using a robot versus manual irradiation found the robot-guided treatment to be much more accurate than the human hand, achieving superior outcomes. Results of the study showed that robotic irradiation demonstrated consistency in distances between beams and distribution in fractions at both 30 and 10 Hz frequencies and was significantly superior to manual irradiation in the ratio of area covered by beams to regions of interest, distances between beams, and distribution in fractions at each frequency. The investigators concluded the robot-guided treatment to be superior to the manually guided treatment.

“As an aesthetic dermatologist myself, I can appreciate that virtually all doctors would welcome the robot-guided treatments, as valuable time can be saved in the busy practice. That saved time can then be invested in other patients and procedures, allowing physicians to see more patients per day. Moreover, due to the heightened precision of robotic-guided treatments, cosmetic treatments are much safer with a significantly reduced chance of adverse events occurring such as burns and spotty hypopigmentation,” Dr. Lee said.

Technology Overview

Current robots used in surgery are under the direct control of a surgeon — the so-called “Master-slave system”, often in a teleoperation scenario in which a human operator manipulates a master input device and the patient-side robot follows the input. There is no autonomy. Traditional minimally invasive surgical robots provide the surgeon with a higher degree of dexterity inside the body, eliminate operator tremor, scale down operator motions to a fraction of normal distances, and provide a very intuitive connection between the operator and the instrument tips. The surgeon can cut, cauterize, suture and reconstruct tissue with accuracy equal to or better than that of invasive open surgery. A surgical system contains both robotic devices and real-time imaging devices to visualize the operative field during the course of surgery.

The use of robotics in medicine inherently involves physical interaction between caregivers, patients, and robots — in all combinations.

Developing user-friendly physical interfaces between humans and robots requires all the classic elements of a robotic system: sensing, perception, and action. A great variety of sensing and perception tasks are required, including recording the motions and forces of a surgeon to infer their intent, determining the mechanical parameters of human tissue, and estimating the forces between a robot and a moving patient. The reciprocal nature of interaction means that the robot will also need to provide useful feedback to the human operator, whether that person is a caregiver or a patient. We need to consider systems that involve many human senses, the most common of which are vision, haptics (force and tactile), and sound. A major reason why systems involving physical collaboration between humans and robots are so difficult to design well is that, from the perspective of a robot, humans are extremely uncertain and dynamic.

Unlike in a passive, static environment, humans dynamically change their motion, force, and immediate purpose throughout a procedure. These changes can be caused by something as simple as physiologic movement (e.g., a patient breathing during surgery), or as complex as the motions of a surgeon suturing during surgery. During physical interaction with a robot, the human is an integral part of a closed-loop feedback system, simultaneously exchanging information and energy with the robotic system, and thus cannot simply be thought of as an external system input002E

In addition, the loop is often closed with both human force and visual feedback, each with its own errors and delays that can potentially cause challenges in a human-robot system. Given these problems, how does one guarantee safe, collaborative and useful physical interaction between robots and humans? To date, no existing systems provide the user with an ideal experience of physically interacting with a robot. Device design and control are essential to the operation of all medical and health robots, since they interact physically with their environment.

Accordingly, one of the most important technical challenges is in the area of mechanisms. Miniaturization is challenging in large part because current electromechanical actuators (the standard because of their desirable controllability and power to weight ratio) are relatively large. Biological analogs (e.g., human muscles) are far superior to engineered systems in terms of compactness, energy efficiency, low impedance, and high force output. Interestingly, these biological systems often combine “mechanisms” and “actuation” into an integrated, inseparable system. Goals for systems that achieve high dexterity at any scale will naturally differ greatly depending on the medical application (e.g. surgery, rehabilitation, and prosthetics).

We are focusing on truly innovative technology that is in line with current applications, but delivers an innovative approach. We are integrating image-guidance with navigation, AI, and organ-targeting to bring a system that is truly diverse and multi-dimensional. Having identified limitations in the predominantly non-autonomous robotic systems, we propose a disruptive model, which considers design and development through a seamless collaboration of the surgeon, the engineer and the scientist.

The core of the design and engineering of our medical robotic system is the AI-driven robotic arm navigation and guidance software which permits the system to autonomously guide a medical, surgical grade robotic arm and end-effector for safer and more effective treatment of patients. Our initial medical robotic system is designed to perform minimally invasive, surgical facial corrections using a micro-needling device for skin resurfacing. We plan to quickly follow this up with a laser end-effector, a tool useable for various skin resurfacing procedures. This modular approach should allow us to quickly adopt future technologies and instruments with only minor adaptations to the end-effectors and surgical tools approved for use.

The key technology in our system is the Avra Intelligent Instrument Guidance Software (“AIIGS”), an image-guided robotic guidance system that receives real-time 3D images, live sensor inputs from various subsystems to calculate precise orientation of the arm and end-effector over the patient in real-time during a procedure, ultimately allowing precision delivery of treatment to any area of the human body that is beyond the capabilities of a human being, and which should allow for more optimal and consistent treatments. The various image capture and sensor subsystems are outlined below and include, 2D image capture, 3D image capture and tracking, distance sensors, and touch sensors. We expect the AIIGS capability should then be relatively easily employed to support other surgical procedures beyond skin resurfacing, such as skin and wound care, drug delivery, tattoo removal, cellulite reduction, biopsies and Mohs surgery, to name a few.

In the case of facial micro-needling, through our proprietary intuitive graphic user interface, the doctor will be able to acquire a high-resolution depth map of the patient’s face and superimpose a trajectory map over Aesthetic Regions-of-Interest (“AROIs”). The doctor would then accept the suggested treatment protocol or assign specific micro-needling parameters to each AROI. AIIGS will autonomously control the arm and end-effector to follow a predetermined path based on the doctor’s specified parameters for each AROI, and continuously calculate the current and desired position over the sequential AROIs to ensure the precise treatment parameters are met. It will also reorient the end-effector so it is perpendicular to each AROI to ensure optimal application of micro-needling injection, and with the precise pressure needed, accounting for patient movement in real-time.

Our medical robotic subsystems modules are outlined below. Areas of continuous development work include AI, DL, and medical robotic safety guidelines.

While we plan to continue to develop our own custom robotic arm we are using an existing robotic arm that has been specifically developed under medical device standards and that meets all of our requirements for a robotic arm. The robot is classified as a lightweight robot and is a jointed-arm robot with seven axes. All drive units and current-carrying cables are routed inside the robot. Every axis contains multiple sensors that provide signals for robot control (e.g. position control and impedance control) and that are also used as a protective function for the robot. Every axis is monitored by sensors: axis range sensors ensure that the permissible axis range is adhered to, torque sensors ensure that the permissible axis loads are not exceeded, and temperature sensors monitor the thermal limit values of the electronics.

Our medical robotic system requires high levels of accuracy and repeatability. Repeatability is a measure of the ability of the robot to consistently reach a specified point in 3D space (X, Y, Z). Accuracy is a measure of the distance error between the commanded point and the achieved point. Accuracy can be improved with external sensing, for example proximity, vision system or infra-red.

For skin resurfacing, technological improvements in motors, materials and in high resolution imaging allow for the use of robotic devices to assist the surgeon to autonomously treat damaged skin. Presently, we are not aware of any commercially available robotic devices designed for this application.

Application of Artificial Intelligence and Deep Learning

Artificial intelligence, or AI, refers to software technologies that make a robot or computer act and think like a human. Some software engineers state that it is only artificial intelligence if it performs as well or better than a human. In this context, when we talk about performance, we mean human computational accuracy, speed, and capacity.

Artificial intelligence includes the development of computer systems that can perform tasks that normally require human intelligence. Speech recognition, decision-making, visual perception, for example, are features of human intelligence that artificial intelligence may possess. Translation between languages is another feature.

Humans can “learn as we go along.” In other words, learn from experience. Machines with AI can also do this, which we call machine learning. A neural network is an example of machine learning.

A broad definition of a Deep Learning (“DL”) solution is the implementation of algorithms and techniques that endow machines with the ability to autonomously acquire the skills for executing complex tasks effectively letting robots acquire their own skills over time.

The term “learning” can be equated to an optimization process. Optimizing an objective that reflects the actual fitness of the behavior at accomplishing a specific task, such as a robot learning optimal trajectory, where the objective is to traverse a predetermined trajectory in a timely, safe and efficient manner. Telling our AIIGS system to find the optimal trajectory is a very high-level objective. This cannot be implemented with simple, static equations that control the robotic arm and end-effector, but with a reinforcement-learning algorithm we can discover the behavioral skills that optimize the goal. We will need to choose a “representation” for a behavioral skill.

A representation could be a trajectory, a sequence of points, a motion. The robot could traverse to a specific point, but will do so from its current pose. What if you ask it to go to the same point from a different starting pose? The same sequence will not work. It needs to be more flexible to control a more complex movement. This could be in the form of a feedback controller where it looks at the state, applies a function and outputs the action. The more flexible the representation, the greater number of skills can be learned as it relates to a real-world environment.

One choice for a general, flexible representation is a Large Neural Network (“LNN”) that can represent any function; therefore, they can represent any motor skill. It needs more prior knowledge in order to learn. This is where sensor feedback is used and integrated. These can be cameras, tactile sensors, joint encoders that feed into the LNN, reducing the need to engineer specific perceptions and actions for any input modality.

For non-embodied systems such as image processing and speech processing, machine learning has been used and is very successful. This is primarily due to having good supervision. Learning is very successful when you know what the output should be for a given input.

Deep Learning is a typical machine learning method which we intend to use extensively for the perception and intelligent control of our medical robotic system. We intend to apply a DL approach to detect and recognize facial features and use this information to optimally map, code and plan a trajectory over the individual AROIs virtually superimposed over a patient’s face. This is accomplished through “feature” learning. In machine learning and pattern recognition, a feature is an individual measurable property or characteristic of a phenomenon being observed. Choosing informative, discriminating and independent features is a crucial step for effective algorithms in pattern recognition, classification and regression.

DL is typically classified into three categories: supervised learning, unsupervised learning, and reinforcement learning.

With our medical robotic system, some examples of functionality where DL will be employed are:

Product Description

There are five key elements to our medical robotic system, all of which can potentially generate revenues:

Regulatory Strategy

Our products and operations will be subject to extensive regulation in the U.S. by the FDA and by similar agencies in other countries or regions in which we may market our medical robotic systems. In order to smooth our market entry a comprehensive regulatory strategy has been devised where we create robust preclinical and clinical data supporting our product’s claims and proving the Avra Medical Robotic Arm is safe and will perform as intended. We plan to employ four tiers of tightly interrelated activities. The specific undertaking in each of the tiers will be coordinated in advance with each regulatory jurisdiction where we intend to offer the product line for sale (the U.S., Canada, the European Union, Brazil, Japan and Australia). The four tiers are:

1. Preclinical testing of the system (the controller, the computer, the arm and the end-effector.) Preclinical testing encompasses testing without using the device on human subjects. Key facets of preclinical testing are electrical safety, EMC and EMI testing; integration testing of the system elements and the development of a clinical training program.

2. Software involves all elements of the arm’s operations. The documentation required to demonstrate safety and effectiveness is comprehensive. Each task within a process is mapped and controlled. A risk matrix is established to guide the software development and also to play the pivotal role in verification, validation and testing.

3. Proof of concept testing follows preclinical and software. In proof of concept we demonstrate the arm and its end-effector operation and that even someone with little robotic experience can successfully use the arm within the indications for use and for the purposes intended. A three-stage demonstration will be undertaken first on animals of various sizes and weights; then on human cadavers of various sizes and weights and finally on a small cohort of human subjects. Each stage must be successfully completed before the next stage is undertaken. The final stage (human proof of concept testing) will be under the supervision of an Institutional Review Board (“IRB”) or similar ethics committee.

4. The strength of our testing to date has two aims — address all aspects of risk and second to minimize the size and expense of a human clinical trial. It is our belief that any remaining element of risk or uncertainty will only require a small sample size (50 or less). Regardless of the sample size the human clinical trial shall have a performance endpoint and a safety endpoint that will serve as milestones to measure the outcome.

To support our ongoing compliance the company plans to become registered to the requirements of EN ISO 13485, the U.S.FDA QSR, ANVISA from Brazil, TGA from Australia, Health Canada, Japanese MHLW and CE Marking under new Medical Device Regulations. To achieve this with minimal expense, we plan to use a Medical Device Single Audit Program (“MDSAP”) Auditing Organization that is also a European Notified Body.

Unless an exemption applies, each medical device that we intend to market in the U.S. must first receive either “510(k) clearance” or “Premarket (PMA) approval” from the FDA pursuant to the Federal Food, Drug, and Cosmetic Act. The FDA’s 510(k) clearance process usually takes from four to 12 months, but it can last longer. The process of obtaining PMA approval can be more costly, lengthy and uncertain. It generally takes from one to three years or even longer.

The FDA decides whether a device must undergo either the 510(k) clearance or PMA approval process based upon statutory criteria. These criteria include the level of risk that the agency perceives is associated with the device and a determination whether the product is similar to devices that are already legally marketed. Devices deemed to pose relatively less risk are placed in either class I or II, which requires the manufacturer to request 510(k) clearance, unless an exemption applies. The manufacturer must demonstrate that the proposed device is “substantially equivalent” in intended use, safety and effectiveness to a legally marketed “predicate device” that is either in class I, class II, or is a “pre-amendment” class III device, one that was in commercial distribution before May 28, 1976, for which the FDA has not yet called for submission of a PMA application. After a device receives 510(k) clearance, any modification to the device that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require a PMA approval.

Devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting, or devices deemed not substantially equivalent to a legally marketed predicate device, are placed in class III. Such devices are required to undergo the PMA approval process in which the manufacturer must prove the safety and effectiveness of the device to the FDA’s satisfaction.

PMA application must provide preclinical and clinical trial data as well as information about the device and its components regarding, among other things, device design, manufacturing and labeling. As part of the PMA review, the FDA will inspect the manufacturer’s facilities for compliance with cGMP and QSR requirements, which include elaborate testing, control, documentation and other quality assurance procedures. During the FDA’s review, an FDA advisory committee, typically a panel of clinicians, likely will be convened to review the application and recommend to the FDA whether, or upon what conditions, the device should be approved. Although the FDA is not bound by the advisory panel decision, the panel’s recommendation is important to the FDA’s overall decision-making process. If the FDA’s evaluation of the PMA application is favorable, the FDA typically issues an “approvable letter” requiring the applicant’s agreement to comply with specific conditions or to supply specific additional data or information in order to secure final PMA approval.

Once the approvable letter conditions are satisfied, the FDA will issue a PMA order for the approved indications, which can be more limited than those originally sought by the manufacturer. The PMA order can include post-approval conditions that the FDA believes necessary to ensure the safety and effectiveness of the device including, among other things, restrictions on labeling, promotion, sale and distribution. Failure to comply with the conditions of approval can result in an enforcement action, including withdrawal of the approval. After approval of a PMA, a new PMA or PMA supplement may be required in the event of modifications to the device, its labeling or its manufacturing process.

A clinical trial may be required to support a 510(k) submission and generally is required for a PMA application. Such trials generally require an Investigational Device Exemption, or IDE, application be approved in advance by the FDA for a specified number of patients and study sites, unless the product is deemed an insignificant risk device eligible for more abbreviated IDE requirements. The IDE must be supported by appropriate data, such as animal and laboratory testing results. Clinical trials may begin if the FDA and the appropriate institutional review boards at the clinical trial sites approve the IDE. Trials must be conducted in conformance with FDA regulations and institutional review board requirements.

In order for us to market our products in other countries, we must obtain regulatory approvals and comply with safety and quality regulations in those countries. These regulations, including the requirements for approval or clearance and the time required for regulatory review, vary from country to country.

To expedite securing approvals to market, we initially retained the services of HPG, a consulting firm experienced in securing U.S. and foreign approvals to market medical devices. HPG prepared and filed an application with the FDA for our initial medical robotic system and participated in the initial pre-collaboration meeting with the FDA in August 2019. This is the first of a series of meetings where the Avra system and its regulatory requirements will be discussed in ever-increasing specificity. We believe that this should allow us to closely focus on only the meaningful activities saving both resources and time. The robotic arm we will utilize for our system has already been approved in the EU and received a CE mark. The Company has begun implementing a quality and regulatory system that will serve as the foundation for U.S., Canadian, European, Australian, Japanese, and Brazilian market access for our medical robotic system. The Medical Device Single Audit Program, which we are employing, is a single inspection that, when completed, is expected to support market access to these six most important medical device marketplaces.

Our regulatory strategy has been designed so that once the first treatment is approved then following treatments, such as those using lasers, should enjoy a much quicker time to approval. Our expected timeline may change depending on available resources and FDA response times.

We plan to be registered via the MDSAP in accordance with the requirements of the U.S. FDA, Health Canada, Australian TGA, MHLW Japan, ANVISA of Brazil and the EU Medical Device Regulation, and plan to have completed integration testing for the system (controller, computer, arm, cabling, end-effector and the software) for at least two medical systems within two years of receipt of required funding.

Depending upon the terms of our agreement with the FDA on the need for and depth of proof of concept and clinical trial testing we believe that we should have completed the proof of concept and human clinical trial portion within one year of our agreement with them. We would then hold market clearances for our robotic system from the U.S. FDA, Health Canada, and CE Marking under the European Medical Directive. At around the same time, we believe that we will have made substantial progress toward market clearances in Australia, Japan and Brazil.

Manufacturing and Sources of Supply

We plan to initially assemble our systems in our own facilities and will only begin using contract manufacturers when the volume of systems being sold becomes sufficiently large to justify outsourcing. Most of the components used in our initial medical robotic system consist of existing hardware technologies relatively easily available from multiple sources. We will then make any required modifications to allow them to be assembled on site. Recent advances in such manufacturing techniques as 3D printing should allow us to do so relatively quickly. The software integration into our initial medical robotic system, calibration and testing is expected to be done on site as well. We have already identified potential manufacturers for the modified end-effectors, such as the microneedling tool, and other components we will integrate into the system.

Intellectual Property

Our proprietary software and algorithms are expected to be one of the greatest value drivers for the Company. The software and AI links all our robotic system’s various sensors, systems and tools and allows them to work seamlessly together to complete procedures autonomously given the treatment parameters provided by the operator.

To date, we have submitted six provisional patents which, upon further review internally with our IP counsel, were subsequently combined into one (1) international utility patent application. This consolidation brought together the various parts of our AIIGS. In addition, it included broad device claims involving the combination of a navigation system, sensors, a variety of end-effectors, and the robotic arm. The national stages of the international patent application were then submitted in the U.S. in July 2018 and in Brazil in December 2018. In April 2018, we also submitted a U.S. design patent application, specifically applied to the robotic arm segment housing. This design patent application was subsequently filed in Canada in October 2019.

We intend to continue filing, as necessary, patent applications in the U.S., as well as in other jurisdictions where we intend to market our products and where the dates of our initial patent applications will give us a right of priority.

We also expect to accumulate a tremendous amount of data as needed for its AI and DL systems. This should result in continuous improvements in patient outcomes. This proprietary data should not only be of value to Avra, but may also be of value to third parties in the aesthetics world.

Research Partnership with UCF

Effective as of May 2016, we entered into a Research Agreement with UCF (the “Research Agreement”) establishing a research partnership for the development of a prototype surgical robotic device supporting minimal invasive surgical facial corrections. Pursuant to the Research Agreement, UCF provided personnel for the development of prototype navigation and control software for the robotic medical device and the integration of all the necessary subcomponents. UCF engineering doctoral students under the direction of Professor of Electrical Engineering Zhihua Qu assisted Avra with its research and development efforts in autonomous medical robotics pursuant to the Research Agreement, which was extended several times and finally expired in April 2021. We provided funding of $163,307 for the project, which was supplemented by a $68,952 matching funds grant from the Florida High Tech Corridor Council. In addition, Avra paid UCF $43,548 for outright ownership of work developed by UCF in the collaboration.

Competition

The development and commercialization of medical devices is highly competitive. We will compete with a variety of multinational companies and specialized medical device companies, as well as technology being developed at universities and other research institutions.

As our technology would replace current handheld solutions, our natural competition would be existing manufacturers of those handheld devices such as Hologic’s Cynosure, Syneron Medical, and Lumenis. The current aesthetics device market is fragmented with no single company dominating the sector, particularly in the laser and micro-needling segments. Based on our research and communications with the FDA, we are not currently aware of any companies developing an autonomous robotic approach to aesthetics procedures.

As our strategy includes building a robotic platform system that would work with any handheld device, we are not tied to any particular treatment or device and could potentially partner with manufacturers of any particular end-effector technology versus competing with them. This strategy also ensures that our aesthetics solutions never become outdated as we would only need to adapt emerging end-effector instrumentation and technology to our robotic system.

Employees

As of the date of this report the Company has four full-time and six part-time employees, including certain executive officers. We also rely on independent third-party consultants to perform additional services as needed. As we implement our business plan and subject to the availability of capital, additional employees will be hired to meet the needs of our growth. We currently have agreements with several individuals, particularly in the software, artificial intelligence and engineering disciplines, who are currently working on a part-time basis, but will become full-time Avra employees upon financing.

Item 1A. Risk Factors.

As a “smaller reporting company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1924, 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 2. Properties.

The Company currently does not own any properties but leases an office from UCF at 3259 Progress Drive, Suite 114, Orlando, FL 32826 under a lease expiring July 31, 2023, at a rental of $2,082.64 per month.

Item 3. Legal Proceedings.

Currently there are no legal proceedings pending or threatened against us. However, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in any such matter may harm our business.

Item 4. Mine Safety Disclosures.

Not applicable. 

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

From July 2018 through September 2018, our common stock traded on the OTCPink tier of the over-the counter market operated by OTC Markets Group, Inc. From September 2018 until September 2020, our common stock traded on the OTCQB tier of the over-the-counter market and from September 2020 until September 2021, our common stock again traded on the OTCPink tier of the over-the-counter market. As a result of the death of the principal of our independent registered public accounting firm in December 2019 and the subsequent cessation of that firm’s operations, we temporarily ceased filing our periodic reports under the Exchange Act. Accordingly, commencing September 28, 2021, our common stock commenced trading on the Expert Market. The filing of this report is part of our efforts to become current in our Exchange Act filings and have our common stock traded on the OTCPink or OTCQB tiers of the over-the counter market, although there is no assurance that we will be able to do so.

The trading symbol for our common stock is AVMR. Regardless of which market our common stock has traded on, the trading market for our common stock has been sporadic and extremely limited. There can be no assurance that a liquid public trading market for our shares will develop or if developed, that it will be sustained

Holders of our Common Stock

As of November 1, 2022, we had 39,197,099 shares of common stock issued and outstanding and 181 holders of record of our common stock.

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

Recent Sales of Unregistered Securities.

During the quarter ended December 31, 2021, the Company issued and sold the following shares of our common stock without registration under the Securities Act of 1933, as amended (the “Securities Act”):

On October 26, 2020, AVRA issued an aggregate 256,027 Units (“Units”) at a price of $1.00 per Unit in a private offering (the “Offering”) to four “accredited investors.” Each Unit consisted of (a) four shares of our common stock (“Shares”); (b) a three-year warrant to purchase five Shares at an exercise price of $0.40 per Share; and (c) a put option of their Membership Units in Avra Air LLC for one share of our common stock. As a result of the foregoing, the investors were issued an aggregate of 1,024,108 Shares, warrants to purchase 1,280,135 Shares and put options for 256,027 Shares. One of the accredited investors, per his original commitment, subsequently invested an additional $45,000 on May 3, 2021 in this same Unit funding thus receiving an additional 180,000 Shares, a warrant to purchase 225,000 Shares and a put option for 45,000 Shares.

On December 22, 2020 one accredited investor and the CEO invested $25,000 and $202,700, respectively, into 227,700 Units at a price of $1.00 per Unit in a private offering (the “Offering”). Each Unit consisted of (a) four shares of our common stock; and (b) a three-year warrant to purchase five Shares at an exercise price of $0.40 per share. As a result of the foregoing, they were issued an aggregate of 910,800 Shares, and warrants to purchase 1,138,500 shares. The CEO used a total of $202,700 of Notes due to him from the Company to purchase these Units.

On November 6, 2020, AVRA made an investment of $210,000 in Avra Air which was made with $40,000 in cash and the balance by the issuance to Avra Air of 472,222 restricted shares of our common stock valued at $0.36 per share.

On October 27, 2020, one investor paid $2,100 to the Company to exercise his option to purchase 21,000 shares at $0.10 per share.

On November 6, 2020 6 consultants were issued a total 60,489 restricted shares of our common stock per their service agreements.

On November 6, 2020 Director Ettore Tomassetti was issued 10,000 restricted shares of our common stock per his Stock Grant dated April 15, 2019.

On November 6, 2020 our Chief Strategy Officer was issued 160,000 restricted shares of our common stock per his employment agreement dated March 1, 2018 and his Stock Grant Award dated April 15, 2019.

On November 6, 2020 our Chief Medical Officer was issued 70,000 restricted shares of our common stock per his employment agreement dated September 15, 2017.

On October 1, 2021, the Company’s CEO, converted a total of $595,000 of accrued salary into 5,950,000 shares of common stock at a price of $0.10 per share and agreed to receive 450,000 shares of common stock for $45,000 of the remaining salary due for the three months ending December 31, 2021at a price of $0.10 per share.

On October 1, 2021, a former employee now a consultant elected to convert a total of $251,500 of accrued consulting fees into 2,515,000 shares of common stock at a price of $0.10 per share, converted $161,500 of accrued salary into 1,615,000 shares of common stock at a price of $0.10 per share. and $4,500 of expenses into 45,000 shares of common stock at a price of $0.10 per share.

All the above securities were issued pursuant to the exemptions from registration under the Securities Act afforded by Section 4(a)(2) thereof and/or Regulation D thereunder.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations

Introduction

The financial statements appearing elsewhere in this prospectus have been prepared assuming the Company will continue as a going concern. The Company was recently formed and has not established sufficient operations or revenues to sustain the Company. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The following table provides selected financial data about our Company at December 31, 2020 and December 31, 2019:

To date, the Company has relied on debt and equity raised in private offerings to finance operations and no other source of capital has been identified or sought. If we experience a shortfall in operating capital we could be faced with having to limit our research and development and marketing activities.

Year ended December 31, 2021, as compared to year ended December 31, 2020

Revenues. We had no revenues during the years ended December 31, 2021, and December 31, 2020.

Research and Development Expenses. Research and development expenses during year ended December 31, 2021 were $1,000, as compared to $3,000 for the year ended December 31, 2020. Research and development expenses reflect continuing development work on the Company’s prototype robotic system at its facilities at UCF’s incubator in Orlando, Florida.

Compensation Expense. We had compensation expense of $947,237 and $812,190 during year ended 2021 and 2020 respectively. This includes compensation for the management staff and stock-based compensation expense related to the Company’s 2016 Stock Incentive Plan. 

General and Administrative Expenses. We incurred $458,801 in general and administrative expenses during the year ended December 31, 2021, as compared to $287,737 for the year ended December 31, 2020. General and administrative expenses include legal and other professional expenses related to the Company’s filings as a public company with the Securities and Exchange Commission (the “SEC”). 

Other Income (Expenses). We have earned $118 during year ended 2021 as compared to a net negative of $(21,754) during 2020. The net negative number for 2020 is primarily attributable to investment loss, offset in part by forgiveness of a PPP loan.

Net Loss. We incurred a net loss of $(1,484,313) for 2021 as compared to a net loss of $(1,124,681) for 2020. The increase in net loss from 2021 to 2020 is primarily a result of the increase in General and administrative expenses and compensation expenses.

Liquidity and Capital Resources

The Company expects to require substantial funds for research and development, to continue to develop its initial proposed medical robotic system. The Company plans to meet its operating cash flow requirements by raising additional funds from the sale of our securities and, if possible, on favorable terms, by entering into development partnerships to assist the Company with its technology development activities.

During the period from inception (February 4, 2015) through December 31, 2019, the Company raised (a) $1,900 from an initial private offering of its common stock in February 2017; (b) $480,000 from the private offering of the convertible notes completed in June 2017; (c) $135,000 from a private offering of 135,000 shares of common stock at a price of $1.00 per share completed in February 2017; (d) $542,260 from a private offering of 433,808 shares of stock in a private offering at a price of $1.25 per share completed in September 2017; and (e) $20,000 from the private sale of 16,000 shares of our common stock at a price of $1.25 per share in August 2018.

In March 2019, the Company sold 7.5 Units in a private offering of ten (10) units (“Units”), each Unit consisting of a $10,000 principal amount six-month promissory note bearing interest at the rate of 5% per annum and a three-year warrant to purchase 5,000 shares of common stock at an exercise price of $1.25 per share.

In addition to the foregoing, from December 2018 thru October 2020, the Company obtained sixteen loans from Barry F. Cohen, our Chief Executive Officer totaling $497,700. The loans were due 12 months from funding date and did not bear interest. With the exception of two loans totaling $145,000, all of these loans were subsequently repaid in full via conversions into restricted company shares or Units including one loan for $100,000 which was used to exercise a stock option for 1,000,000 shares held by Mr. Cohen.

On October 26, 2020, AVRA issued an aggregate 256,027 Units (“Units”) at a price of $1.00 per Unit in a private offering (the “Offering”) to four “accredited investors.” Each Unit consisted of (a) four shares of our common stock (“Shares”); (b) a three-year warrant to purchase five Shares at an exercise price of $0.40 per Share; and (c) a put option of their Membership Units in Avra Air LLC for one share of our common stock. As a result of the foregoing, the investors were issued an aggregate of 1,024,108 Shares, warrants to purchase 1,280,135 Shares and put options for 256,027 Shares.

On December 22, 2020 one accredited investor and the CEO invested $25,000 and $202,700, respectively, into 227,700 Units at a price of $1.00 per Unit in a private offering (the “Offering”). Each Unit consisted of (a) four shares of our common stock; and (b) a three-year warrant to purchase five Shares at an exercise price of $0.40 per Share. As a result of the foregoing, they were issued an aggregate of 910,800 Shares, and warrants to purchase 1,138,500 Shares. The CEO used a total of $202,700 of Notes due to him from the Company to purchase these Units.

On February 10, 2020, AVRA issued an aggregate 235,000 Units (“Units”) at a price of $1.00 per Unit in a private offering (the “Offering”) to four “accredited investors.” Each Unit consisted of (a) four shares of our common stock (“Shares”); (b) a three-year warrant to purchase five Shares at an exercise price of $0.40 per Share. As a result of the foregoing, the investors were issued an aggregate of 940,000 Shares.

Between October 5, 2021 and December 8, 2021 the Company sold a total of 2,229,231 shares of common stock at prices ranging between $0.13 and $0.52 per share. The Company received proceeds of $315,200.

While we have been successful in raising funds to fund our operations since inception and we believe that we will be successful in obtaining the necessary financing to fund our operations going forward, we do not have any committed sources of funding and there are no assurances that we will be able to secure additional funding. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, if the efforts noted above are not successful, it would raise substantial doubt about the Company’s ability to continue as a going concern. If we cannot obtain financing, then we may be forced to further curtail our operations or consider other strategic alternatives. Even if we are successful in raising the additional financing, there is no assurance regarding the terms of any additional investment and any such investment or other strategic alternative would likely substantially dilute our current shareholders.

Critical Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates included deferred revenue, costs incurred related to deferred revenue, the useful lives of property and equipment and the useful lives of intangible assets.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.

ASC 740-10 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 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.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures. 

(a) Disclosure Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

Our Chief Executive Officer, as our principal Executive, Financial and Accounting Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2020, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, as our Principal Executive, Financial and Accounting Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer, as our principal Executive, Financial and Accounting Officer, has concluded that as of December 20, 2019, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described in Item 9A(b) of this report.

Our Chief Executive Officer, as our principal Executive, Financial and Accounting Officer, does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officer has determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

(b) Management’s Report on Internal Control over Financial Reporting 

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer, as our Principal Executive, Financial and Accounting Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of management and directors of our Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our 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 provide absolute assurance that a misstatement of our financial statements would be prevented or detected. 

Our Chief Executive Officer, as our Principal Executive, Financial and Accounting Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, as of December 31, 2020, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by 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 (our principal executive, financial and accounting officer), or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer, as our Principal Executive, Financial and Accounting Officer, has concluded that as of December 31, 2019, our disclosure controls and procedures were not effective at the reasonable assurance level reasonable assurance level in that:

Our Chief Executive Officer, as our Principal Executive, Financial and Accounting Officer, does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officer has determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

(c) Remediation of Material Weaknesses

To remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party firm to assist us in remedying this material weakness once resources become available.

We also intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order to segregate duties in a manner that establishes effective internal controls once resources become available.

(d) Changes in Internal Controls Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Our directors and executive officers and their respective ages and titles are as follows:

Set forth below is a brief description of the background and business experience of our directors and executive officers.

Barry F. Cohen founded the Company and has served as its Chief Executive Officer and a director since February 4, 2015. Between 2006 and 2008, Mr. Cohen was a private investor and founded AVRA Surgical, Inc., a medical technology company. Prior to founding AVRA, Mr. Cohen was a director of Dualis Med-Tech from 2012 to 2014 and has been a director of AvraMiro since 2009 and Avra Surgical Robotics, Inc. since 2011, which companies are 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 (n/k/a FINRA) member firm from 1983 to 1999. Mr. Cohen has over 50 years’ experience in managing private and public industrial companies, and 47 years’ experience as a securities executive. This significant experience qualifies Mr. Cohen to serve as a director.

Dr. Ray Powers, who became our Chief Operating Officer on August 1. 2016, was an executive within the Bell System for 30 years prior to moving on to C-level positions in the technology sector serving in both private and public companies. He has served as Director of Standards for the Project Management Institute, and on their Board of Directors as well as on several non-profit boards. During the last 5 years, he has been a full-time professor and administrator in higher education. In December 2015, Dr. Powers and his spouse filed a petition for bankruptcy protection under Chapter 11 of the Bankruptcy Code. Their plan of reorganization was confirmed and the bankruptcy was discharged in December 2016. Dr. Powers holds a professional project manager credential (PMP); a bachelor of science degree in business from Arizona State University; a master of arts degree in education; a master of arts degree in business (MBA); and a doctorate degree in leadership (EdD).

Farhan Taghizadeh, M.D., 45, became our Chief Medical Officer on September 15, 2017, after serving as a member of our Medical Advisory Board since October 1, 2016. Dr. Taghizadeh received his undergraduate degree from Yale University and attended medical school at Penn State University. He completed his residency at the University of Rochester in Rochester, New York and his post-residency fellowship at the University of Bern, Switzerland. Dr. Taghizadeh has authored numerous publications and received many honors. He is certified by the American Board of Otolaryngology-Head and Neck Surgery. Dr. Taghizadeh is an expert in facial rejuvenation, having performed over 3,000 face lifts and thousands of laser procedures. He has authored numerous publications, spoken at many national meetings, and has been involved as a consultant and luminary with various companies in the facial aesthetic arena. Dr. Taghizadeh holds various patents in the field of personalized skincare and automated aesthetic devices. He completed the FDA studies for the Vivace, an advanced RF Microneedling technology, and in 2015, founded Aesthetics Biomedical, a thought leader in the innovation of treatment serums, masks, numbing cream and recovery agents to optimize the results of the treatments they design. In 2014, Dr. Taghizadeh co-founded Omni Bioceutical Innovations, an innovative skin treatment and care solutions company, which was a presenter at MEIDAM in 2017. Dr. Taghizadeh also founded Amnioaesthetics, a company launched in 2016, which is dedicated to advancing amniotic products in the space of regenerative skin and hair care. He has also served as the Chief Medical Director of Arizona Facial Plastics since 2016. Dr. Taghizadeh’s interest in robotics stems from his 2013 publication outlining the steps to use robots to conduct facial cosmetic procedures. His recent research focuses on advancing various laser applications, robotics and personalized skincare solutions.

Alen Sands York who became a Director on March 1, 2020, has over sixty years of entrepreneurial and international business experience. From managing a third-generation family home textile company in the USA and Germany to diverse ventures in advertising, public relations, international marketing, automotive and marine industries, industrial design, motion pictures, restaurants, wine and spirits. He is multilingual, an artist, published author and poet. He has worked in the USA, Cuba, Mexico, Japan, the UK, Hong Kong, the Philippines, and Germany. His family has a medical background and for the last ten years has been dedicated to the development of surgical robotics internationally. We believe that Mr. York’s business experience makes him a valuable member of our Board of Directors.

Mr. Ettore Tomassetti who became a Director on March 1, 2020, has over fifty-five years of experience in Electromechanical Design and Fabrication, Food Processing, Building Sciences and Customer Service. After several years of Military Service, he went on to managing/directing a variety of service and manufacturing companies. His business acumen allowed him to secure contractual agreements with commercial and retail businesses in Germany, Canada, Mexico, UK and throughout the Caribbean Islands. For the past five years he has been involved in the design and fabrication of medical robotic instruments and air sanitizing devices. Given his experience, we believe that Mr. Tomassetti is well qualified to serve as a Director of the Company.

Terms of Office

Our directors are appointed for a one-year term to hold office until the next annual meeting of our shareholders 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.

Director Independence

At present, we believe that our two non-employee directors (Messrs. York and Tomassetti) are “independent” as defined under Rule 10A-3(b)(1) under the Exchange Act.

Board Committees

Our board of directors does not currently have an audit committee, a compensation committee, or a corporate governance committee. We plan to establish such committees in the near future, all the members of which will be “independent” directors.

Code of Ethics

We have we adopted a Code of Ethics that applies to employees, including our principal executive officer, principal financial officer, or persons 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.

Medical Advisory Board

The Company has also established a medical advisory board, whose members meet periodically in person or by telephone with management and/or the board of directors to advise on scientific, product development and marketing matters. The current members of the medical advisory board are:

Dr. Nikhil L. Shah, D.O., who served as a director of the Company from October 1, 2016 until March 1, 2018, at which time he stepped down from such position and became the Company’s Chief Strategy Officer until March 1, 2020, at which time he stepped down as an executive officer of the Company, but continued in the role of the Company’s Chief Strategy Officer on an advisory basis. Dr. Shah is one of the top global leaders in robotic surgery and is currently the Chief of Minimal Access and Robotic Surgery at Piedmont Healthcare in Atlanta, GA. He previously served as the Director of Urology and Urologic Oncology at Piedmont Atlanta Hospital from 2012 to 2016. He holds an Associate Professor (adjunct) at the Georgia Institute of Technology in the College of Computing — Robotics & Intelligent Machines. Prior positions also include the Section Chief of Urology, Department of Surgery, Saint Joseph’s Hospital of Atlanta, and the Director of Robotic Surgery, Saint Joseph’s Hospital of Atlanta. Dr. Shah is founder and board member of the Men’s Health & Wellness Center in Atlanta. This is a 501(3)(c) non-profit that works to educate men on screening and prevention for all health issues affecting the aging male as well as awareness of cancer conditions affecting men and their partners. Given his experience, he has been an invited speaker and advisor for organizations in the financial arena, academia and medical device Industry. Dr. Shah has a Bachelor’s of Science (B.S.) degree in Neurobiology from the University of Michigan in Ann Arbor, a Master’s in Health Management & Health Policy from the University of Michigan in Ann Arbor, and his Doctor of Osteopathic Medicine (D.O.) degree from the Kirksville College of Osteopathic Medicine.

Dr. Vipul Patel, M.D., is Medical Director of the Global Robotics Institute at Florida Hospital. Founder of the Society of Robotic Surgery, Dr. Patel has personally performed the most robotic surgeries in the world, 12,000+ robotic prostatectomies. He is the editor emeritus of The Journal of Robotic Surgery and editor of the first-ever robotic urology textbook. He is a professor of urology at the University of Central Florida, College of Medicine in Orlando, Florida, and a clinical associate professor of urology at Nova Southeastern University, also in Orlando. He is the founder of the International Prostate Cancer Foundation and a founding member of the Society of Robotic Surgery. He serves as an honorary professor at the University of Milan, Korea University and Ricardo Palma University in Lima, Peru, and was recently made an honorary professor of the Russian Academy of Science. Dr. Patel received his Bachelor of Science degree in Biological Science from the University of Southern California, Los Angeles, California and his Medical Degree from Baylor College of Medicine, Houston, Texas.

Dr. Juan Jose Badimon, Ph.D., is a Professor of Medicine and Director of the Atherothrombosis Research Unit at the Cardiovascular Institute, Mount Sinai School of Medicine, New York. His academic appointments include the Mayo Clinic, Massachusetts General Hospital, Harvard University, Boston, and Mount Sinai School of Medicine, New York. His major research interests are focused on pathogenesis and treatment of atherothrombosis and cardiovascular diseases. Dr. Badimon has published more than 370 peer-reviewed articles in athero-thrombosis, imaging and cardiovascular diseases. He serves as reviewer for 10 of the top journals in cardiovascular diseases. Dr. Badimon holds a Pharmacy degree from the University of Barcelona and a Ph.D. degree in Pharmacology from the University of Barcelona.

Dr. Heywood Y. Epstein, M.D., was Chief Resident in Radiation Therapy at Montefiore Hospital in the Bronx, NY, Assistant Professor of Radiology at Columbia Physicians and Surgeons, New York University, Mount Sinai Medical School in New York City, and SUNY at Stony Brook on Long Island. While in the U.S. Public Health Service (“USPHS”) he was both Director of Staten Island Radiology Residency Program, Director of their Radiology Technologist Training Program, and USPHS radiation safety officer for the Northeast United States. Dr. Epstein helped establish NYU’s first ultrasound section in their Radiology Department and has co-authored 25 articles for juried journals. Dr. Epstein has performed approximately 10,000 angiograms and interventional radiographic procedures, in addition to another 10,000 breast biopsies guided by ultrasound, and stereotactically Dr. Epstein holds a bachelor’s degree in biology from Harvard University and received his Medical Degree from State University of New York.

Dr. Jochen Binder, M.D., was the first physician worldwide to perform a daVinci® prostate surgery in 2000, and in 2005 Dr. Binder received Recognition of the First daVinci® Prostatectomy, European Robotic Urology Symposium ERUS, Geneva. His live surgeries have been televised via global viewing. He is a published author and the subject of many articles and reviews. He was Chief of the Urology Department at Universitatsklinikum Frankfurt am Main, Klinik fur Urologie und Kinderurologie and Kantonsspital, Frauenfeld, Switzerland. He is currently with Klinik Seeschau Kreuzlingen, Klinik Hirslanden Zurich, Spital Mannedorf and Klinik Uroviva Bulach. Dr. Binder has a Professor Doctorate (PD) from the University of Frankfurt and received his Medical

Degree from the University of Glessen, Germany.

Members of the medical advisory board are compensated through the grant of a stock option awards under our 2016 Incentive Stock Plan. Except for Dr. Shah, current members each received a five-year option to purchase 36,000 shares at an exercise price equal to fair market value as of the date of grant, 6,000 shares of which vested upon grant and the balance of which vest in twelve quarterly installments of 2,500 shares each, subject to continued service. Dr. Shah received a five-year option to purchase 108,000 shares at an exercise price equal to fair market value as of the date of grant vesting in thirty-six monthly installments of 3,000 shares each, subject to continued service.

Scientific Advisory Board

The Company has also established a scientific advisory board, whose members meet periodically in person or by telephone with management and/or the board of directors to advise on scientific, product development and marketing matters. Set forth below is a brief description of the background and business experience of the current members of our scientific advisory board.

Andrew M. Economos, Ph.D., initially worked in the aerospace computing industry in Los Angeles, and after some years moved to Princeton to work in RCA’s Sarnoff Labs. From there he went to RCA subsidiary company NBC in New York, where he was Vice President of Management Information Services, managing the immense computing needs of NBC. From there he founded and led a highly successful broadcast software company, Radio Computing Services, which he sold in 2006 to Clear Channel Communications (now iHeartMedia). He has served on The New York Botanical Garden’s Science Committee and Corporation Board, the Board of Selby Gardens in Sarasota, and the Board of the Science Committee of Westchester Community College. Dr. Economos earned his M.S in Mathematics at the University of Florida and his Ph.D. in Mathematical Statistics at UCLA.

Fred Nazem, Ph.D., has been building highly disruptive, industry-leading healthcare and technology companies since the late 1970’s. He is best known as the turnaround specialist who, as Chairman, led the successful reorganization of Oxford Health Plans, which was later sold to United Healthcare for more than $6 billion. A number of his start-up ventures, including Cirrus Logic Inc., Bluebird Bio, and Genesis Health Ventures, have grown to become billion-dollar enterprises and more than a dozen of them have achieved multi-billion-dollar revenue status. A scientist turned financier, Mr. Nazem holds a bachelor’s degree in biochemistry from Ohio University, a master’s degree in physical chemistry from the University of Cincinnati, and an MBA in finance from Columbia University.

Bijan Safai, M.D., D.Sc., was trained in internal medicine and dermatology at NYU Medical School and completed a fellowship in immunology at Memorial Sloan Kettering Cancer Center (“MSKCC”). He continued his career at MSKCC where he established a dermatology program to include research, education and patient care.  During his tenure, he developed programs for the management of various skin cancers, lymphoma of the skin and Kaposi’s Sarcoma. Dr. Safai has a bachelor’s degree from the University of Tehran, Iran, a Medical Degree from Tehran University School of Medicine in Iran and a Doctor of Medical Sciences (D.Sc.) in immunology from the University of Gutenberg, Sweden.

Members of the scientific advisory board are compensated through the grant of a stock option awards under our 2016 Incentive Stock Plan. Current members each received a five-year option to purchase shares at an exercise price equal to fair market value as of the date of grant, subject to continued service.

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, 2021, December 31, 2020, and December 31, 2019.

Employment and Service Agreements

The Company is party to an employment agreement with Barry F. Cohen, its Chief Executive Officer. Mr. Cohen’s employment agreement currently expires June 30, 2024 and provides for a base salary currently set at $15,000 per month. The employment agreement also provides for reimbursement of other reasonable business expenses incurred by Mr. Cohen in the performance of his duties and contains confidentiality and non-competition provisions. We are also party to “at will” service agreements with our Chief Medical Officer, Dr. Farhan Taghizadeh and our Chief Operating Officer, Ray Powers.

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, 2021.

Compensation of Directors

On March 1, 2020 our Director Mr. Peter Carnegie resigned and was replaced on the same date by Mr. Ettore Tomassetti.

On March 1, 2020 both of our Independent Directors received an Option for 36,000 restricted common shares of our Company with an exercise price of $0.25 per share and vesting equally over 36 months.

On October 1, 2021 both of our Independent Directors received an Option for 50,000 restricted common shares of our Company with an exercise price of $0.25 per share and vesting equally over 36 months.

2016 Incentive Stock Plan

Our 2016 Incentive Stock Plan (the “2016 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. The 2016 Plan is administered by the compensation committee, or alternatively, if there is no compensation committee, the board of directors. 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. As of the date of this report, we have granted options to purchase 16,056,000 shares under the 2016 Plan, exercisable at prices ranging from of $0.10 to $2.00 per share and 3,113,000 shares in stock grants. As of December 31, 2021, the Company has granted options to purchase 7,815,361 shares under the 2016 Plan, exercisable at prices ranging from of $0.10 to $2.00 per share and 2,903,000 shares in stock grants.

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 report, the beneficial ownership of our common stock by each director and executive officer, by each person known by us to beneficially own 5% or more of our common stock and by directors and executive officers as a group.  Unless otherwise stated, the address of the persons set forth in the table is c/o the Company, 3259 Progress Drive, Suite 114, Orlando, FL 32826.

The persons 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

Item 13.  Certain Relationships and Related Transactions, and Director Independence.

Related Party Transactions

We describe below transactions since January 1, 2019, to which we were a party or will be a party, in which the amounts involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years ending December 31, 2021; and any of our directors, nominees for director, executive officers or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest.

We have granted stock options to our named executive officers and certain of our directors. See the section titled “Executive Compensation — Outstanding Equity Awards at Year-End” for a description of these stock options.

We are party to an employment agreement with our Chief Executive Officer, which, among other matters, provides for certain severance and change in control benefits. See the section titled “Executive Compensation— Employment Agreement” for a description of this agreement.

During 2018, compensation owed the late A. Christian Schauer, and former director for the period from January 1, 2018, until his resignation as an executive officer on February 28, 2018, was converted into 9,000 shares of our common stock during 2018.

In December 2018, the Company obtained loans from the late A. Christian Schauer, our former Chief Financial Officer and a non-affiliated shareholder, in the principal amounts of, $20,000 and $15,000, respectively. The loans were due December 31, 2019 and did not bear interest, other than the loan obtained from the non-affiliated shareholder, which bore interest at the rate of 4% per annum, payable upon maturity. In December 2019, the loan from Mr. Schauer was converted into 13,334 shares of our common stock, and the non-affiliated shareholder loan was repaid in full.

In addition to the foregoing, from December 2018 thru October 2020, the Company obtained sixteen loans from Barry F. Cohen, our Chief Executive Officer totaling $497,700. The loans were due 12 months from funding date and did not bear interest. With the exception of two loans totaling $145,000, all of these loans were subsequently repaid in full via conversions into restricted company shares or Units, totaling 1,195,415 restricted common shares and warrants to purchase 1,013,500 restricted common shares, and one loan for $100,000 was used to exercise an Option for 1,000,000 shares granted under our 2016 Plan to Mr. Cohen.

On April 15, 2019 Dr. Shah, the Company’s Chief Strategy Officer, was issued a performance bonus in the form of a stock grant under the 2016 Plan, in the amount of 300,000 shares of our common stock per a vesting schedule. 100,000 shares vest on each yearly anniversary of the grant.

On December 1, 2019 the Board of Directors issued a bonus to Mr. Cohen as allowed under his Employment Agreement in the form of an option to purchase 750,000 shares of the Company’s common stock at an exercise price of $1.00.

In March 2020 the Company issued a total of 389,000 stock options to the Company’s CEO with an exercise price of $0.25 per option for the extension of loans.

In December 2020 the Company issued a total of 390,000 stock options to the Company’s CEO with an exercise price of $0.25 per option for the extension of loans.

In July 2021 the Company issued a total of 90,987 shares to Dr, Nikhil Shah, Chief Strategy Officer, with an exercise price of $0.15 per option as a result of a ‘cashless’ exercise of an option for 102,361 shares.

In July 2021 the Company issued a total of 32,000 shares to Dr. Farhan Taghizadeh, Chief Medical Officer, with an exercise price of $0.15 per option as a result of a ‘cashless’ exercise of an option for 36,000 shares.

In July 2021 the Company issued a total of 69,444 shares to Dr. Ray Powers, Chief Operating Officer, with an exercise price of $0.15 per option as a result of a ‘cashless’ exercise of an option for 75,000 shares.

In October 2021 the Company issued a total of 390,000 stock options to the Company’s CEO with an exercise price of $0.25 per option for the extension of loans.

In October 2021 the Company issued a total of 350,000 stock options to the Company’s Chief Medical Officer with an exercise price of $0.25 per option.

In October 2021 the Company issued a total of 200,000 stock options to the Company’s Chief Strategy Officer with an exercise price of $0.25 per option.

In October 2021 the Company issued a total of 50,000 stock options to the Company’s Independent Director, Alen York, with an exercise price of $0.25 per option.

In October 2021 the Company issued a total of 50,000 stock options to the Company’s Independent Director, Ettore Tomassetti, with an exercise price of $0.25 per option.

Review, Approval and Ratification of Related Party Transactions

Given our small size and limited financial resources, we had not adopted formal policies and procedures for the review, approval or ratification of transactions with our executive officers, directors and significant shareholders.  However, we intend that such transactions will, on a going-forward basis, be subject to the review, approval or ratification of our board of directors, or an appropriate committee thereof.

Item 14.  Principal Accounting Fees and Services.

BF Borgers CPA PC. (“Borgers”) is our current independent registered public accounting firm and was such for the years ended December 31, 2021 and December 31, 2020.

Audit Fees

Aggregate audit fees billed by Borgers for the years ended December 31, 2021 and December 31, 2020 was $37,000.

Audit-Related Fees

There were no audit-related fees billed by Borgers for the years ended December 31, 2021 and December 31, 2020.

Tax Fees

There were no tax fees billed by Borgers for the years ended December 31, 2021 and December 31, 2020.

Pre-Approval Policy

We do not currently have a standing audit committee. Provision of the above services was approved by our board of directors.

PART IV

Item 15. Exhibits, 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.

Item 16. Form 10-K Summary.

None.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of AVRA Medical Robotics, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of AVRA Medical Robotics, Inc. as of December 31, 2021 and 2020, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, 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.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors 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. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. 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 audit 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 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 audit included performing procedures to assess the risks of material misstatement of the 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 financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/S/ BF Borgers CPA PC

BF Borgers CPA PC

PCAOB ID 5041

We have served as the Company's auditor since 2021

Lakewood, CO

October 31, 2022

AVRA MEDICAL ROBOTICS, INC.

BALANCE SHEETS

AS OF DECEMBER 31,

The accompanying notes are an integral part of these financial statements.

AVRA MEDICAL ROBOTICS, INC.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,

The accompanying notes are an integral part of these financial statements.

AVRA MEDICAL ROBOTICS, INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,

The accompanying notes are an integral part of these financial statements.

AVRA MEDICAL ROBOTICS, INC.

STATEMENT OF SHAREHOLDERS’ DEFICIT
FOR THE YEARS ENDED DECEMBER 31,