SS Innovations International Inc(SSII) - 2024 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements Q1 2024 financial statements show increased assets and liabilities, $6.85 million revenue, a $2.8 million net loss, filed without auditor review due to auditor dismissal - The company filed this quarterly report without the required auditor review because its independent registered public accounting firm, BF Borgers CPA PC, was barred by the SEC on May 3, 2024 The company dismissed Borgers on May 13, 2024, and will amend the report after engaging a new firm and completing the review[9] Condensed Consolidated Balance Sheets As of March 31, 2024, total assets increased to $31.0 million, liabilities to $17.5 million, and equity slightly decreased Condensed Consolidated Balance Sheet Data (in USD) | Balance Sheet Item | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $19,786,958 | $18,382,700 | | Total Assets | $31,045,225 | $25,479,086 | | Total Current Liabilities | $15,663,238 | $9,270,670 | | Total Liabilities | $17,509,627 | $11,181,102 | | Total Stockholders' Equity | $13,535,597 | $14,297,984 | Condensed Consolidated Statements of Operations Q1 2024 revenues surged to $6.85 million, gross profit reached $2.98 million, resulting in a $2.80 million net loss Statement of Operations Summary (Three months ended March 31, in USD) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenues | $6,851,058 | $1,511,379 | | Gross Profit | $2,977,720 | $511,175 | | Operating Loss | $(2,718,177) | $(2,962,852) | | Net Loss | $(2,798,448) | $(2,992,362) | | Net Loss Per Share | $(0.02) | $(0.05) | Condensed Consolidated Statements of Cash Flows Q1 2024 cash flows show positive operating cash, significant investing outflows, and financing inflows, resulting in a net cash decrease Cash Flow Summary (Three months ended March 31, in USD) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,338,218 | $(173,553) | | Net Cash Used in Investing Activities | $(4,207,606) | $(2,000,000) | | Net Cash from Financing Activities | $2,739,507 | $1,433,828 | | Net Change in Cash | $(129,881) | $(739,724) | Notes to Condensed Consolidated Financial Statements Notes detail 'going concern' status, $4.1 million working capital surplus, $38.1 million accumulated deficit, Q1 2024 sales of 8 systems, and recent capital raises - The company acknowledges a 'going concern' risk, citing a net loss of $2.8 million for Q1 2024 and an accumulated deficit of $38.1 million, despite having a working capital surplus of $4.1 million Management is focused on raising further funding to scale operations[23][24][29] - In Q1 2024, the company sold 8 surgical robotic systems, bringing the total systems sold to 23 Additionally, it has installed 5 systems on a pay-per-use basis, 3 for clinical evaluation, and 1 at Johns Hopkins for training, totaling 32 systems in its network[26] - In February 2024, the company raised $2.45 million by issuing 7% One-Year Convertible Promissory Notes, convertible at $4.45 per share This included a $1 million investment from a holding company owned by the CEO[27][59][81] - As a subsequent event, the company raised an additional $2.0 million in April 2024 from Sushruta Pvt Ltd through two one-year 7% promissory notes to meet working capital needs[82] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2024 revenue surge to $6.85 million, increased operating expenses, a $2.8 million net loss, recent capital raises, and ongoing 'going concern' risks - The company is a commercial-stage surgical robotics company focused on making its SSi Mantra system accessible in underserved regions As of March 31, 2024, it has a network of 32 systems installed (23 sold, 5 pay-per-use, 3 for evaluation, 1 for research), with over 1000 procedures performed[83][85][86] Results of Operations Comparison (Three months ended March 31, in USD) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenues | $6,851,058 | $1,511,379 | +353% | | Salary & Payroll Expense | $674,436 | $357,674 | +89% | | SG&A Expenses | $2,611,019 | $1,490,414 | +75% | | Net Loss | $(2,798,448) | $(2,992,362) | -6.5% | - The company raised $2.45 million in February 2024 through convertible notes and filed a Registration Statement on Form S-1 for a proposed public offering An additional $2.0 million was raised in April 2024[94][95] - Management states that if efforts to raise additional capital are not successful, it would raise substantial doubt about the Company's ability to continue as a going concern, potentially forcing it to curtail operations[96] Item 3. Quantitative Disclosures About Market Risks The company is exempt from providing this information due to its status as a "smaller reporting company" - As a "smaller reporting company," SS Innovations International, Inc. is not required to provide the information for this item[107] Item 4. Controls and Procedures Disclosure controls were ineffective as of March 31, 2024, due to documentation and segregation of duties issues, with remediation efforts underway - The Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2024, the company's disclosure controls and procedures were not effective at a reasonable assurance level[108] - Identified control deficiencies include: - Lack of written documentation for some internal control policies and procedures - Incomplete segregation of duties within accounting functions[112] - The company is remediating these weaknesses, including implementing a new ERP system at its Indian operating subsidiary (SSI-India) to integrate business functions[109] PART II - OTHER INFORMATION Item 1. Legal Proceedings No new legal proceedings are currently pending or threatened against the company beyond those previously disclosed - There are no legal proceedings currently pending or threatened against the company, other than those previously reported in Exchange Act filings[114] Item 1A. Risk Factors The company is exempt from providing this information due to its status as a "smaller reporting company" - As a "smaller reporting company," the company is not required to provide the information for this item[115] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period - None reported for the period[116] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported by the company - None reported[117] Item 4. Mine Safety Disclosures This disclosure item is not applicable to the company's operations - Not applicable[118] Item 5. Other Information No other information was reported by the company for the period - None reported[119] Item 6. Exhibits The report includes Section 302 and 906 certifications from the CEO and CFO, along with Inline XBRL data files - Exhibits filed with the report include: - 31.1 & 31.2: Section 302 Certifications (CEO & CFO) - 32.1 & 32.2: Section 906 Certifications (CEO & CFO) - 101 Series: Inline XBRL Documents - 104: Cover Page Interactive Data File[120]