SS Innovations International Inc(US:SSII)2025-05-14 20:17PART I – FINANCIAL INFORMATION This section presents the company's financial statements, management's analysis, market risk disclosures, and controls and procedures Financial Statements For Q1 2025, total assets increased to $63.5 million, liabilities decreased to $22.9 million, and net loss improved to $5.7 million, though going concern doubts persist Condensed Consolidated Balance Sheet Data (Unaudited) | Balance Sheet Items | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $15,873,217 | $466,500 | | Total Current Assets | $47,619,943 | $27,416,291 | | Total Assets | $63,456,961 | $42,385,213 | | Liabilities & Equity | | | | Total Current Liabilities | $14,996,713 | $21,330,222 | | Total Liabilities | $22,902,671 | $28,928,110 | | Total stockholders' equity | $40,554,290 | $13,457,103 | Condensed Consolidated Statements of Operations (Unaudited) | Income Statement Items | Three months ended March 31, 2025 ($) | Three months ended March 31, 2024 ($) | | :--- | :--- | :--- | | Total revenue | $5,120,610 | $3,637,693 | | Gross Profit | $1,087,208 | $728,182 | | Loss from operations | ($5,921,853) | ($9,832,319) | | Net Loss | ($5,681,353) | ($9,841,753) | | Net loss per share - basic and diluted | ($0.03) | ($0.06) | Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Items | Three months ended March 31, 2025 ($) | Three months ended March 31, 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($6,103,374) | ($2,671,918) | | Net cash used in investing activities | ($872,804) | ($127,255) | | Net cash provided by financing activities | $22,406,019 | $2,638,259 | | Net change in cash | $15,429,841 | ($160,914) | - The company's reliance on related parties for funding and a history of net losses raise substantial doubt about its ability to continue as a going concern, necessitating further funding for operations2636 Management's Discussion and Analysis of Financial Condition and Results of Operations Management reports a 40.8% revenue increase and reduced net loss in Q1 2025, driven by higher sales and lower stock compensation, despite ongoing going concern doubts Results of Operations For Q1 2025, total revenue increased to $5.1 million, gross profit rose to $1.1 million, and net loss decreased to $5.7 million due to reduced stock compensation expenses Comparison of Operations for the three months ended March 31 | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Total Revenue | $5,120,610 | $3,637,693 | | Gross profit | $1,087,208 | $728,182 | | Research & development expense | $1,010,095 | $527,991 | | Stock compensation expense | $2,379,212 | $7,108,750 | | Selling, general and administrative expense | $3,410,872 | $2,843,659 | | Loss from operations | ($5,921,853) | ($9,832,319) | | Net loss | ($5,681,353) | ($9,841,753) | - Revenue increased primarily due to the sale of an increased number of surgical robotic systems and instruments in Q1 2025 compared to Q1 2024181 - The significant decrease in net loss was primarily the result of a $4.7 million reduction in stock compensation expense, partially offset by a $0.57 million increase in SG&A expenses189 - Research and development expenses nearly doubled to $1.01 million, reflecting the company's continued focus on improving its SSi Mantra surgical robotic system183 Liquidity and Capital Resources The company's Q1 2025 liquidity significantly improved due to $22.4 million in financing activities, primarily from a $28 million convertible note issuance, despite ongoing going concern doubts - In January 2025, the company raised $28 million from an affiliate through a 7% convertible promissory note, with $30 million in principal plus accrued interest subsequently converted into common stock in February and March 2025196198199 Cash Flow Summary for the three months ended March 31, 2025 | Cash Flow Activity | Amount ($) | | :--- | :--- | | Net cash used in operating activities | ($6,103,374) | | Net cash used in investing activities | ($872,804) | | Net cash provided by financing activities | $22,406,019 | | Cash at the end of period | $22,078,788 | - Despite recent fundraising, management states there are no committed sources of funding, raising substantial doubt about the Company's ability to continue as a going concern207 Critical Accounting Policies Critical accounting policies involve significant management judgment, particularly in valuing stock options and determining standalone selling prices for bundled revenue contracts - Critical accounting policies involve significant estimates, including the fair value of stock options and the standalone selling price in bundled revenue contracts209 - The fair value of stock-based awards is determined at the grant date using models like Black-Scholes, which requires significant judgment on inputs like expected volatility and term210211 - For sales with multiple products and services, revenue is allocated based on relative standalone selling prices, estimated using market conditions and historical data if not directly observable214 Quantitative and Qualitative Disclosures About Market Risk This section is not applicable for the reporting period - Not applicable217 Controls and Procedures As of March 31, 2025, the company's disclosure controls were ineffective due to material weaknesses, prompting a remediation plan including enhanced reviews and a new ERP system - Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025220 - Material weaknesses identified include: failure to properly apply U.S. GAAP, lack of written documentation of internal control policies, and insufficient segregation of duties within accounting functions220 - The remediation plan includes enhancing transaction review processes, engaging external experts for guidance, and implementing a new comprehensive cloud-based ERP system221222 PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, unregistered equity sales, defaults, mine safety, other information, and exhibits Legal Proceedings The company is involved in litigation in the Bahamas regarding a disputed 9% ownership claim in its subsidiary, Otto Pvt Ltd, with the CEO providing full indemnification - In April 2024, an ex-shareholder of the subsidiary Otto Pvt Ltd initiated litigation in the Bahamas, claiming ownership of 9,000 shares (approx. 9% interest)226 - The company asserts the shareholding was cancelled in July 2022 due to the plaintiff's failure to pay the agreed-upon consideration, and the company believes the outcome will be favorable226 - The company's CEO, Dr. Sudhir Srivastava, has entered into an Indemnification Agreement to fully cover any claims, damages, and legal fees the company may incur from this litigation227 Risk Factors This section is not applicable for the reporting period - Not Applicable229 Unregistered Sales of Equity Securities and Use of Proceeds Between December 2024 and March 2025, the company received $30 million in financing from its CEO's holding company via convertible notes, which were subsequently converted into 21,858,368 shares of common stock at $1.38 per share - The company received $30 million in financing from its CEO's holding company, Sushruta Pvt Ltd, through several tranches of one-year 7% convertible promissory notes issued between December 2024 and March 2025230 - As of March 31, 2025, the entire $30 million principal plus $164,548 in interest was converted into 21,858,368 shares of common stock at a conversion price of $1.38 per share230 - The securities were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933231 Defaults Upon Senior Securities None reported - None232 Mine Safety Disclosures This section is not applicable - Not applicable233 Other Information None reported - None233 Exhibits The report includes Section 302 and Section 906 certifications from the CEO and CFO, along with Inline XBRL financial data files - Filed exhibits include Section 302 and 906 certifications from the CEO and CFO234 - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, and Presentation) are also included as exhibits234