SS Innovations International, Inc. - Annual Report: 2022 (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, 2022

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 March 30, 2023, was 53,887,738 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 11th, 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 November 7, 2022, AVRA entered into a definitive Merger Agreement (the “Merger Agreement”), by and among AVRA, AVRA-SSI Merger Corporation, a Delaware corporation and wholly-owned subsidiary of AVRA (“Merger Sub”), CardioVentures, Inc., a Delaware corporation (“SSI - DE”) Dr. Sudhir Srivastava (“Dr. Srivastava”), who, through his holding company, owns a controlling interest in SSI-DE.

SSI-DE, through a subsidiary, owns a controlling interest in Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company (“SSI - India”). Based in Haryana, India, SSI-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”).

Pursuant to the Merger Agreement, Merger Sub will merge with and into SSI – DE (the “Merger”). In the Merger, holders of the outstanding shares of common stock of SSI – DE at closing (including certain parties providing Interim Financing as described below), will receive in exchange for their SSI – DE shares, such number of shares of AVRA common stock as will result in such holders owning 95% of the outstanding post-Merger shares of AVRA common stock, with the current shareholders of AVRA owning 5% of the outstanding post-Merger shares of AVRA common stock.

In addition to the foregoing, upon completion of the Merger, the holders of SSI – DE common stock will receive, pro rata, shares of newly designated Series A Non-Convertible Preferred Stock (the “Series A Preferred Shares”).

The Series A Preferred Shares will vote together with Shares of our common stock as a single class on all matters presented to a vote of stockholders, except as required by law and entitle the holders of the Series A Preferred Shares to exercise 51.0% of the total voting power of the Company. The Series A Preferred Shares are not convertible into common stock, do not have any dividend rights and have a nominal liquidation preference. The Series A Preferred Shares also have certain protective provisions, such as requiring the vote of a majority of Series A Preferred Shares to change or amend their rights, powers, privileges, limitations and restrictions. The Series A Preferred Shares are automatically redeemable by the Company for nominal consideration at such time as the holder owns less than 50% of the shares of AVRA common stock received in the Merger.

Concurrent with consummation of the Merger, Dr. Srivastava will assign the SSI Intellectual Property being utilized by SSI – India in the development, manufacture and sale of its robotic surgical system to a subsidiary of AVRA. In exchange for such assignment, Dr. Srivastava will receive a royalty of three percent (3%) of net revenues (gross revenues less cost of goods sold) generated from the sale or license of products using the SSI Intellectual Property.

In addition, at closing, the current directors and executive officers will resign, other than Barry Cohen, who will continue as a director and in a new executive capacity, and the designees of the SSI – DE stockholders will be appointed to AVRA’s board of directors and management. Post – Merger, AVRA intends to focus a significant part of its efforts on expanding and further developing the business of SSI-India, which will be an indirect majority-owned subsidiary of AVRA.

In addition to customary closing conditions, consummation of the Merger is subject to the following conditions to be satisfied or waived by SSI – DE and Dr. Srivastava at or prior to consummation of the Merger:

The Merger Agreement, the Merger and the above corporate actions have been approved by AVRA’s board of directors and majority stockholders. They are subject to the final processing of an Issuer Company – Related Action Notification Form, which we have filed with the Financial Industry Regulatory Authority and the filing of appropriate amendments to our Articles of Incorporation with the Florida Secretary of State.

Interim Financing

As contemplated by the Merger Agreement, pending consummation of the Merger, we have provided SSI – DE and its affiliates, a total of $5,000,000 in interim financing as of the date of this Report (the “Interim Financing”). The Interim Financing is evidenced by one-year promissory Notes made in favor of the Company by SSI-DE and its affiliates, including Dr. Srivastava, jointly and severally (the “SSI Notes”). Interest on the SSI Notes accrues at the rate of 7% per annum, payable together with the principal amount at maturity. The SSI Notes have an original issue discount of 10% for the first $2,000,000 and 6% for the balance. If the SSI Notes are not repaid in full on or at maturity, they will automatically convert into a percentage equity interest in SSI-DE determined by dividing the principal amount of accrued interest on the SSI Notes divided by $100 million. The SSI Notes contain customary default provisions and other typical terms and conditions.

Prior to consummation of the Merger, we may make additional advances to SSI – DE and its affiliates, evidenced by additional SSI Notes. These SSI Notes will be substantially similar in form and substance to the initial SSI Notes, provided, however, that SSI 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 may be $250 million as opposed to $100 million.

In order to fund the Interim Financing, the Company offered and sold to two accredited investors, a total of $3,000,000 and $2,000,000 in principal amount of one-year convertible promissory notes (the “Convertible Notes”), respectively. The Convertible Notes will have the same interest rate and payment terms as the SSI Notes and otherwise be substantially similar to the SSI Notes, provided, however, that the Convertible Notes do not have an original issue discount. Further, upon consummation of the Merger (if and when it is consummated) the Convertible Notes will automatically convert into a number of shares of AVRA common stock 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 of common stock issued to the stockholders of SSI-DE upon consummation of the Merger.

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

Pending the Merger, each of AVRA and SSI–DE and its affiliates may seek to secure additional equity or debt financing, including, without limitation, further Interim Financing. 

Employees

As of the date of this report the Company has two full-time and three part-time employees, including certain executive officers. We also rely on independent third-party consultants to perform additional services as needed.

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, Orlando, FL 32826 under a lease expiring July 31, 2023, at a rental of $404.68 per month.

Item 3. Legal Proceedings.

Currently there are no material 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 OTC Pink 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 OTC QB tier of the over-the-counter market and from September 2020 until September 2021, our common stock again traded on the OTC Pink 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. In early December 2022, the Company became current again in our Exchange Act filings and our common stock began trading again on the OTC Pink tier of the over-the counter market.

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 March 30, 2023, we had 53,887,738 shares of common stock issued and outstanding and 191 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, 2022, the Company issued and sold 4,401,000 shares of our common stock to 21 accredited investors at $0.25 per share receiving $1,100,250 in total proceeds.

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, 2021 at 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.

On July 1, 2022 the Company paid $5,000 and issued to a consultant an option for 2,520,000 common shares with an exercise price of $0.10 per share as a performance bonus and for foregoing all accrued and unpaid fees due for 2022 and for foregoing a portion of the fees due for the remaining five months of calendar year 2022. The option vested immediately.

On July 1, 2022 the Company issued to its CEO an option for 5,400,000 common shares with an exercise price of $0.10 per share as a performance bonus and for foregoing all of his 2022 salary. The option vested immediately.

On July 1, 2022 the Company issued to its Chief Medical Officer an option for 500,000 common shares with an exercise price of $0.10 per share as a performance bonus. The option vested immediately.

On July 1, 2022 the Company issued to its Chief Strategy Advisor an option for 500,000 common shares with an exercise price of $0.10 per share as a performance bonus. The option vested immediately.

On July 1, 2022 the Company issued 240,270 shares of common stock as payment in full for the accrued but unpaid fees due to its Counsel.

On July 1, 2022 the Company issued 27,250 shares of common stock to its patent attorney per their fee agreement.

On July 1, 2022 the Company issued 160,000 shares of common stock to its Chief Strategy Officer as required by his Stock Grant Award dated April 15, 2019 and his Employment Agreement dated March 1, 2018.

On July 1, 2022 the Company issued 40,000 shares of common stock to its Chief Medical Officer as required by his employment agreement dated September 15, 2021

On July 1, 2022 the Company issued a total of 569,747 shares of common stock to several consultants.

In July 2022, four investors exercised their put options obtained from the Offering dated October 26, 2021, transferred their Membership Units in Avra Air LLC back to AVRA and received 301,027 shares of the Company’s common stock in return.

On July 25, 2022 the Directors and Shareholders holding a majority of the issued and outstanding common shares of the Company adopted, by joint written consent, a resolution to increase the Company’s common stock reserved for issuance under the Company’s 2016 Incentive Stock Plan to 20,000,000.

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 International, Inc.”

On November 7, 2022, AVRA entered into a definitive Merger Agreement (the “Merger Agreement”), by and among AVRA, AVRA-SSI Merger Corporation, a Delaware corporation and wholly-owned subsidiary of AVRA (“Merger Sub”), Cardio Ventures, Inc., a Delaware corporation (“SSI - DE”) Dr. Sudhir Srivastava (“Dr. Srivastava”), who, through his holding company, owns a controlling interest in SSI-DE SSI-DE, through a subsidiary, owns a controlling interest in Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company (“SSI - India”). Based in Haryana, India, SSI-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”).

Pursuant to the Merger Agreement, Merger Sub will merge with and into SSI – DE (the “Merger”). In the Merger, holders of the outstanding shares of common stock of SSI – DE at closing (including certain parties providing Interim Financing as described below), will receive in exchange for their SSI – DE shares, such number of shares of AVRA common stock as will result in such holders owning 95% of the outstanding post-Merger shares of AVRA common stock, with the current shareholders of AVRA owning 5% of the outstanding post-Merger shares of AVRA common stock.

In addition to the foregoing, upon completion of the Merger, the holders of SSI – DE common stock will receive, pro rata, shares of newly designated Series A Non-Convertible Preferred Stock (the “Series A Preferred Shares”).

The Series A Preferred Shares will vote together with Shares of our common stock as a single class on all matters presented to a vote of stockholders, except as required by law and entitle the holders of the Series A Preferred Shares to exercise 51.0% of the total voting power of the Company. The Series A Preferred Shares are not convertible into common stock, do not have any dividend rights and have a nominal liquidation preference. The Series A Preferred Shares also have certain protective provisions, such as requiring the vote of a majority of Series A Preferred Shares to change or amend their rights, powers, privileges, limitations and restrictions. The Series A Preferred Shares are automatically redeemable by the Company for nominal consideration at such time as the holder owns less than 50% of the shares of AVRA common stock received in the Merger.

Concurrent with consummation of the Merger, Dr. Srivastava will assign the SSI Intellectual Property to AVRA or a subsidiary of AVRA. Moreover, the current directors and executive officers will resign, other than Barry Cohen, who will continue as a director and in a new executive capacity, and the designees of the SSI – DE stockholders will be appointed to AVRA’s board of directors and management. Post – Merger, AVRA intends to focus a significant part of its efforts on expanding and further developing the business of SSI-India, which will be an indirect majority-owned subsidiary of AVRA.

In addition to customary closing conditions, consummation of the Merger is subject to the following conditions to be satisfied or waived by SSI – DE and Dr. Srivastava at or prior to consummation of the Merger:

The Merger Agreement, the Merger and the above corporate actions have been approved by AVRA’s board of directors and majority stockholders. They are subject to the filing with and processing of an Issuer Company – Related Action Notification Form with the Financial Industry Regulatory Authority and the filing of appropriate amendments to our Articles of Incorporation with the Florida Secretary of State.

On December 1, 2022, 10,000 shares of restricted common stock were issued for services to Farhan Taghizadeh, per his employment agreement dated September 15, 2020.

During the quarter ended December 31, 2022, 60,000 shares of restricted common stock were issued to Nikhil Shah per his consulting agreement dated March 1, 2018. 

On December 1, 2022, 60,000 shares of restricted common stock were issued for services to a corporate services consultant.

During the quarter ended December 31, 2022, 50,000 shares of restricted common stock were issued to legal counsel as a bonus for general corporate advisory and legal services.

During the quarter ended December 31, 2022, 25,000 shares of restricted common stock were issued to each of Ettore Tomassetti and Alen York, in consideration for their services as members of the Board.

During the quarter ended December 31, 2022, 2,060,000 shares of restricted common stock were issued to Barry Cohen as a bonus for his services as Chief Executive Officer for an approximately eight year period.

During the quarter ended December 31, 2022, 2,125,000 shares of restricted common stock were issued to an independent administrative consultant as a bonus for rendering services over and above those required pursuant to an agreement with the Company.

During the quarter ended December 31, 2022, 15,000 shares of restricted common stock were issued to a third-party consultant as a bonus per a services agreement with the Company dated March 15, 2022.

During the quarter ended December 2022, 20,000 shares of restricted common stock were issued for services to Farhan Taghizadeh dated November 1, 2022 as per his employment agreement with the Company dated September 15, 2020.

During the quarter ended December 31, 2022, 18,146 shares of restricted common stock were issued for services completed through September 17, 2022 to an independent consultant, per a services agreement dated June 16, 2022.

During the quarter ended December 31, 2022, 11,641 shares of restricted common stock were issued for services completed through September 17, 2022 to another independent consultant, per a services agreement dated June 16, 2022.

During the quarter ended December 31, 2022, the Company issued to a business consultant 1,000,000 shares of restricted common stock in exchange for services rendered.

The offer and sale of the above securities were made in private transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), in reliance on exemptions afforded by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated 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, 2022 and December 31, 2021:

Balance Sheet Data

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, 2022, as compared to year ended December 31, 2021

Revenues. We had no revenue during the years ended December 31, 2022 and December 31, 2021.

Research and Development Expenses. Research and development expenses during year ended December 31, 2022 were $72,959 as compared to $1,000 for the year ended December 31, 2021. 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 expenses of $1,135,468 and $947,237 during year ended 2022 and 2021 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 $1,239,179 in general and administrative expenses during the year ended December 31, 2022, as compared to $458,801 for the year ended December 31, 2021. 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 $234,594 during the year ended 2022 as compared to $118 during 2021. The increase in other income is primarily result of origination fees on notes.

Net Loss. We incurred a net loss of $2,213,012 for 2022 as compared to a net loss of $1,484,313 for 2021. The increase in net loss from 2022 to 2021 is primarily a result of the increase in consulting fees, payroll expenses, 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.

Between October 5, 2021 to 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.

During the quarter ended December 31, 2022, the Company issued and sold 4,401,000 shares of our common stock at $0.25 per share to 21 purchasers in a private offering. The Company received proceeds of $1,100,250.

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, 2022, 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 31, 2022, 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, 2022, 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, 2022, 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 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. 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.

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.

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, 2022, December 31, 2021, and December 31, 2020.

Employment and Service Agreements

The Company was party to an employment agreement with Barry F. Cohen, its Chief Executive Officer. Mr. Cohen’s employment agreement was set to expire in June 30, 2024 and provided for a base salary of $15,000 per month. The employment agreement also provided for reimbursement of other reasonable business expenses incurred by Mr. Cohen in the performance of his duties and contains confidentiality and non-competition provisions. In December 2022 the Board cancelled the employment agreement with Mr. Cohen and in return paid him the balance of payments due per such agreement through the end of its term. Mr. Cohen agreed to continue to act and perform fully in his role of CEO through the closing of the planned merger with CardioVentures, Inc. 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, 2022.

Compensation of Directors

On October 1, 2021 both of our Independent Directors received on 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.

During the quarter ended December 31, 2022, 25,000 shares of restricted common stock were issued to each of Ettore Tomassetti and Alen York, in consideration for their services as members of the Board.

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 14,986,000 shares under the 2016 Plan, exercisable at prices ranging from of $0.10 to $2.00 per share and 3,008,239 shares in stock grants. As of December 31, 2022, the Company has granted options to purchase 14,966,000 shares under the 2016 Plan, exercisable at prices ranging from of $0.10 to $2.00 per share and 3,003.239 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, 2021, 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, 2022; 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.

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.

Per Mr. Cohen’s renewed employment agreement dated July 1, 2021, he was granted an option for 1,000,000 shares all vesting immediately. On September 22, 2021, Mr. Cohen agreed to convert $50,000 of his accrued but unpaid salary from prior years in shares at $0.13 per share. On October 1, 2021, Mr. Cohen agreed to convert all his accrued but unpaid salary and the balance of his 2021 salary thru the end of the calendar year in shares at $0.10 per share. As a performance bonus and in return for foregoing all of his calendar year 2022 salary, Mr. Cohen was issued an option for 5,400,000 common shares with an exercise price of $0.10 per share all vesting immediately. In December 2022 the Board issued 2,060,000 shares as a performance bonus to Mr. Cohen and the Company canceled its employment agreement dated July 1, 2020 with Mr. Cohen, by paying him the balance of payments due per such agreement through the end of the agreement’s term.

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, 2022 and December 31, 2021.

Audit Fees

Aggregate audit fees billed by Borgers for the years ended December 31, 2022 and December 31, 2021 were $68,400 and $41,160, respectively.

Audit-Related Fees

There were no audit-related fees billed by Borgers for the years ended December 31, 2022 and December 31, 2021.

Tax Fees

There were no tax fees billed by Borgers for the years ended December 31, 2022 and December 31, 2021.

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.

NOTE: WHAT OTHER EXHIBITS SHOULD WE FILE?

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, 2022 and 2021, 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, 2022 and 2021, 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

March 31, 2023

AVRA MEDICAL ROBOTICS, INC.

BALANCE SHEETS

AS OF DECEMBER 31,

The accompanying notes are an integral part of these financial statement

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’ EQUITY
FOR THE YEARS ENDED DECEMBER 31,

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

AVRA MEDICAL ROBOTICS, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – FINANCIAL STATEMENTS

Organization

AVRA Medical Robotics, Inc. (the “Company” or “AVRA”) was incorporated as AVRA Surgical Microsystems, Inc. in the State of Florida on February 4, 2015. Effective November 5, 2015, the Company’s corporate name was changed to AVRA Medical Robotics, Inc. The Company was established to develop advanced medical surgical devices. The Company is structured to invest in four principal areas – surgical robotic systems, surgical tools, implantable devices and surgical robotic training.

Basis of Presentation

The accompanying financial statements are prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”). The Company is a development-stage enterprise devoting substantial efforts to establishing a new business, financial planning, raising capital, and research into products which may become part of the Company’s product portfolio. The Company has not realized sales through December 31, 2021. A development stage company is defined as one in which all efforts are devoted substantially to establishing a new business and, even if planned principal operations have commenced, revenues are insignificant.

Going Concern

The accompanying financial statements have been prepared assuming the continuation of the Company as a going concern. At December 31, 2022, the Company’s stockholders’ equity was $320,231 which raises substantial doubt about the Company. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. The management of the Company is making efforts to raise additional funding until a registration statement relating to an equity funding facility is in effect. While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in the development and commercialization of the products it develops or initiates collaboration agreements thereon. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management.

Cash and Cash Equivalents

The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company maintains its principal cash balance in a financial institution. These balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At December 31, 2022 and 2021, $0 and $147,460, respectively, were in excess of the FDIC insured limit.

Equipment

Equipment is recorded at cost and depreciated using the straight-line method at rates determined to estimate the useful lives of the assets. The annual rates used in calculating depreciation are as follows:

Equipment -5 years straight-line

The Company originally purchased medical equipment for a total cost of $75,000 which was 100% financed by the seller. After making several payments, the Company settled with the vendor due to issues with the equipment and was relieved of the $25,000 balance owed as of first quarter 2020. The total amount paid of $50,000 represents the actual cost. During the year 2022, there is no addition.

Long-lived Assets

In accordance with ASC 360, “Property Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to : significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset and current expectation that the asset will more than likely not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the discounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain circumstances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Stock Compensation Expense

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with Accounting Standards Codification (“ASC”) Topic 505, “Equity.” Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC Topic 505.

Income Taxes

The Company accounts for income taxes pursuant to ASC Topic 740 “Income Taxes.” Under ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company applies the provisions of ASC Topic 740-10-05 “Accounting for Uncertainty in Income Taxes.” The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Basic and Diluted Loss per Share

In accordance with ASC Topic 260 “Earnings Per Share,” basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period, only in periods in which such effect is dilutive. The Company only has stock options and convertible promissory notes that may be converted to outstanding potential common shares.

Research and Development Costs

In accordance with ASC Topic 730 “Research and Development”, with the exception of intellectual property that is purchased from another enterprise and have alternative future use, research and development expenses are charged to operations as incurred.

Fair Value of Financial Instruments

Our financial instruments consist principally of accounts receivable, amounts due to related parties and promissory notes payable. The carrying amounts of cash and cash equivalents and promissory notes approximate fair value because of the short-term nature of these items.

Recent Accounting Pronouncements

Compensation- Stock Compensation

In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” that provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The new guidance became effective for the Company on January 1, 2018 and was applied on a prospective basis, as required. The adoption of this standard did not have an impact on the financial statements or the related disclosures.

Leases

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued ASU 2016-02 to increase transparency and comparability among organizations recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under ASU 2016-02, lessors will account for leases using an approach that is substantially equivalent to existing GAAP for sales-type leases, direct financing leases and operating leases. Unlike current guidance, however, a lease with collectability uncertainties may be classified as a sales-type lease. If collectability of lease payments, plus any amount necessary to satisfy a lessee residual value guarantee, is not probable, lease payments received will be recognized as a deposit liability and the underlying assets will not be derecognized until collectability of the remaining amounts becomes probable. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective transition. The Company did not adopt the standard effective January 1, 2019, utilizing the lessor practical expedient. On November 15, 2019, the FASB issued ASU 2019-10 which amended the effective dates for ASC 842, to give implementation relief. Under the FASB’s new framework, two “buckets” were defined, bucket 1 includes public companies that are SEC filers but excludes “Small Reporting Companies” (SRC’s). Bucket 2 includes all other entities, including SRC’s. Bucket 2 entities have to apply ASC 842 for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2022.

NOTE 3 – INVESTMENT

Investment in Avra Air- LLC was reduced by $12,150 in the second quarter of 2021 as a result of an investor’s follow-on investment. An impairment charge of $77,392 was then taken in the last quarter of 2021. As the $26,000 remaining balance was paid for in the original investment using Avra Medical shares this remaining balance is considered a buy-back of Avra Medical common shares and are thus treated as treasury shares shown in the equity section of the balance sheet. This results in a $0 cost on the books for this investment.

NOTE 4 – NOTES PAYABLE – RELATED PARTY

On September 22, 2021, the Company’s CEO, converted a total of $50,000 of notes payable into 384,615 shares of common stock.

NOTE 5 – PROMISSORY NOTES

During the years ended 2021 and 2022, 1,175,000 and zero warrants with a price of $0.78 per warrant for 2021, were valued at $912,489 and $0.00 using a black-scholes pricing model and expensed as stock compensation, respectively.

NOTE 6 – MERGER

On August 5, 2022, AVRA entered into a non-binding letter of intent with Dr. Sudhir Srivastava (“Dr. Sudhir”), Cardio Ventures Pvt. Ltd., a Bahamian private limited company of which Dr. Sudhir 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. Sudhir (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 $4,000,000 (the “Interim Financing”). Interim Financing is evidenced by six notes - $1,000,000, $100,000, $500,000, $500,000, $900,000, and $1,000,000. All are one-year Automatically Convertible Notes made in favor of the Company by Cardio, Otto and Dr Sudhir, 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% on $2,000,000 and 6% on the balance. 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 condition.

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 Notes, 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 may be $250 million as opposed to $100 million.

In order to fund the Interim Financing, the Company offered and sold one-year convertible promissory notes (the “Convertible Notes”) of $1,000,000 (maturity date 08-15-2023), $500,000 (maturity date 10-26-2023), and $500,000 (maturity date 12-01-2023) to one accredited investor and $100,000 (maturity date 09-10-2023), $900,000 (maturity date 11-23-2023), and $1,000,000 (maturity date 12-29-2023) to another. 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. Sudhir 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.

NOTE 7 – INCOME TAXES

The Company’s deferred tax assets at December 31, 2022 consist of net operating loss carry forwards of $4,393,785. Using a new federal statutory tax rate of 21%, the valuation allowance balance as of December 31, 2020 total of $0. The increase in the valuation allowance balance for the year ended December 31, 2020 of $221,827 is entirely attributable to the net operating loss.

Due to the uncertainty of their realization, no income tax benefits have been recorded by the Company for these loss carry forwards as valuation allowances have been established for any such benefits. The increase in the valuation allowance was the result of increases in the net operating losses discussed above. Therefore, the Company’s provision for income taxes is $-0- for the years ended December 31, 2022 and 2021.

At December 31, 2022 and 2021, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. At December 31, 2022 and 2021, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions.

The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations.

NOTE 8 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue up to 100,000,000 shares of common stock, $0.0001 par value per share plus 5,000,000 shares of preferred stock, par value $0.0001.

During the first quarter 2021, 1,025,00 shares at a value ranging from $0.89-$1.07 per share were issued for services rendered.

During the second quarter 2021, 378,378 shares at a value ranging from $0.89-$1.02 per share were issued for services rendered.

In July, 2021 several holders of stock options elected to exercise their stock options with a cashless exercise provision resulting in the issuance of 629,375 shares of common stock.

During the last quarter 2021, 3,619,817 shares at a value ranging from $0.13-$0.89 per share were issued for services rendered.  

On October 1, 2021 the Company issued a total of 174,553 shares of common stock to several consultants.

On October 1, 2021 the Company issued 25,000 shares of common stock to its Chief Medical Officer.

On December 1, 2022, 10,000 shares of restricted common stock are issued for services to Farhan Taghizadeh, per his employment agreement dated September 15, 2020.

Holders are entitled to one vote for each share of common stock. No preferred stock has been issued.

 NOTE 9 – 2016 INCENTIVE STOCK PLAN

On August 1, 2016, the Company adopted the 2016 Incentive Stock Plan (the “Plan”). The Plan provides for the granting of options to employees, directors, consultants and advisors to purchase up to 3,000,000 shares of the Company’s common stock. The Board is responsible for the administration of the Plan. The Board determines the term of each option, the option exercise price, the number of shares for which each option is granted and the rate at which each option is exercisable. Incentive stock options may be granted to any officer or employee at an exercise price per share of not less than the fair market value per common share on the date of the grant. On August 1, 2019, the Board increased the plan to 10,000,000 shares of 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.

Stock options are accounted for in accordance with FASB ASC Topic 718-10-55-136., Compensation –Stock Compensation, with option expense amortized over the vesting period based on the Black-Scholes option-pricing model fair value on the grant date, which includes a number of estimates that affect the amount of expense. During the years ended December 31, 2022 and 2021, $679,612 and $159,949, respectively, of expensed stock options has been recorded as stock-based compensation and classified in general and administrative expense on the Statement of Operations.

On October 1, 2021 the Company issued a total of 1,500,000 of stock options to consultants with an exercise price of $0.25 per option.

On October 1, 2021 the Company issued 50,000 stock options to each of its two independent Directors with an exercise price of $0.25 per option.

On October 1, 2021 the Company issued 350,000 stock options to its Chief Medical Officer with an exercise price of $0.25 per option.

On October 1, 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.

On June, 2022 the Company issued 150,000 stock options to a consultant with an exercise price of $0.10 per option. This option ceased vesting upon the departure of the consultant in September 2022.

On July 1, 2022 the Company issued 500,000 stock options to its Chief Medical Officer with an exercise price of $0.10 per option.

On July 1, 2022 the Company issued 3,020,000 stock options to consultants with an exercise price of $0.10 per option.

On July 1, 2022 the Board issued 5,400,000 stock options to the CEO as a performance bonus and in return for his foregoing all of his 2002 calendar year salary.

Expected volatilities are based on the average volatilities of six similar companies; fair market values are calculated using the implied share values of recent company financings or OTC closing prices for that day, whichever is more suitable; risk-free rate used was 2%.

NOTE 10 – COMMITMENTS

Employment Agreements

In December 2022 the Company canceled its employment agreement dated July 1, 2021 with Mr. Cohen, by paying him the balance of payments due per such agreement through the end of the agreement’s term. Mr. Cohen agreed to continue in an active role as Chairman and CEO of the Company thru the date of closing of its planned merger with SS Innovations, Inc.

Lease

On July 17, 2020, the Company signed a lease that was effective August 1, 2020 through July 31, 2021, which provides that the Company pay insurance, maintenance and taxes with a monthly lease expense of $1,474.17 plus applicable sales tax.

Effective January 1, 2021, the Company signed an amendment which modified the August 1, 2020 agreement, increasing the monthly lease expense to $1,964.74 plus applicable sales tax.

Effective November 1, 2022 the Company signed and amendment which further modified the August 1, 2020 agreement, reducing the monthly lease expense to $404.68 including applicable sales tax.

Either party may cancel the agreement at any time with 30 days’ notice.

NOTE 11 – SUBSEQUENT EVENTS

As described earlier in this filing, $4,000,000 was raised as part of the Interim Financing Notes in 2022. An additional $1,000,000 in Notes from one of the two existing Note Holders was raised on February 2, 2023.

From January 1, 2023, through the date of this filing, the Company sold 670,000 shares of common stock at a price ranging from $0.25 to $0.45 per share receiving proceeds of $189,500.

On January 27, 2023, the CEO and one individual exercised their stock options via a net cashless exercise resulting in the issuance of 9,678,437 shares.

On January 27, 2023, the CEO exercised his warrant via a net cashless exercise resulting in the issuance of 595,562 shares.

On February 24, 2023, two investors exercised their warrants resulting in the issuance of 600,000 shares and proceeds of $240,000 to the Company.

F-13