SS Innovations International Inc(SSII) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's accounting policies, financial position, and performance for the periods ended June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets The balance sheet shows a significant increase in total assets and stockholders' equity as of June 30, 2025, compared to December 31, 2024, primarily driven by increased cash and inventory, while total liabilities slightly decreased | Metric | June 30, 2025 (in $) | December 31, 2024 (in $) | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $11,375,265 | $466,500 | | Total Current Assets | $50,786,526 | $27,416,291 | | Total Assets | $69,977,771 | $42,385,213 | | Total Current Liabilities | $19,611,108 | $21,330,222 | | Total Liabilities | $27,954,902 | $28,928,110 | | Total Stockholders' Equity | $42,022,869 | $13,457,103 | | Accumulated Deficit | $(49,600,593) | $(43,662,547) | - The company reported a working capital surplus of $31,175,418 as of June 30, 2025[24] Condensed Consolidated Statement of Operations and Comprehensive Loss The company significantly improved its financial performance, reducing net loss and increasing revenue and gross profit year-over-year for both the three and six months ended June 30, 2025, compared to the corresponding periods in 2024 Three Months Ended June 30 | Metric | June 30, 2025 (in $) | June 30, 2024 (in $) | | :---------------------- | :------------ | :------------ | | Total Revenue | $10,000,305 | $4,509,126 | | Gross Profit | $5,915,058 | $1,437,786 | | Income /(Loss) from operations | $97,014 | $(4,100,189) | | Net Loss | $(256,691) | $(4,140,570) | | Net loss per share -basic and diluted | $(0.00) | $(0.02) | Six Months Ended June 30 | Metric | June 30, 2025 (in $) | June 30, 2024 (in $) | | :---------------------- | :------------ | :------------ | | Total Revenue | $15,120,915 | $8,146,819 | | Gross Profit | $7,002,266 | $2,165,968 | | Loss from operations | $(5,623,766) | $(13,932,508) | | Net Loss | $(5,938,044) | $(13,982,323) | | Net loss per share - basic and diluted | $(0.03) | $(0.08) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity significantly increased from December 31, 2024, to June 30, 2025, primarily due to a substantial rise in additional paid-in capital from stock compensation and the conversion of notes payable into common stock | Metric | December 31, 2024 (in $) | June 30, 2025 (in $) | | :-------------------------- | :---------------- | :-------------- | | Common Stock (Amount) | $17,157 | $19,358 | | Additional Paid-In Capital | $56,952,200 | $91,526,999 | | Accumulated Deficit | $(43,662,547) | $(49,600,593) | | Total Stockholders' Equity | $13,457,103 | $42,022,869 | - Conversion of notes payable to equity contributed $30,645,359 to stockholders' equity during the six months ended June 30, 2025[12] - Common stock issued and outstanding increased to 193,588,410 shares as of June 30, 2025, from 171,579,284 shares as of December 31, 2024[130] Condensed Consolidated Statements of Cash Flows The company experienced a significant net increase in cash during the six months ended June 30, 2025, primarily driven by substantial cash provided by financing activities, contrasting with a net decrease in the prior year | Cash Flow Activity | Six Months Ended June 30, 2025 (in $) | Six Months Ended June 30, 2024 (in $) | | :----------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(9,555,703) | $(3,694,486) | | Net cash used in investing activities | $(1,189,452) | $(2,239,139) | | Net cash provided by financing activities | $21,703,921 | $5,292,610 | | Net change in cash | $10,958,766 | $(641,015) | | Cash and cash equivalents at end of period | $17,605,678 | $6,555,402 | - The increase in cash used in operating activities in 2025 was primarily due to increases in inventory, prepaid assets, and accounts receivables, partially offset by increases in deferred revenue and accounts payable[217] Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering organizational background, significant accounting policies, segment information, asset and liability breakdowns, financing activities, and other critical financial details NOTE 1 – FINANCIAL STATEMENTS This note outlines the company's organizational history, including its name change and recapitalization through a merger with CardioVentures, Inc., and its recent uplisting to NASDAQ. It also details the basis of presentation for the unaudited interim financial statements and highlights a going concern uncertainty due to accumulated deficits and net losses - The company changed its name to "SS Innovations International, Inc." and uplisted to the NASDAQ Stock Market LLC, with common shares commencing trading under "SSII" effective April 25, 2025[17][19] - A recapitalization occurred on April 14, 2023, where CardioVentures, Inc. was treated as the accounting acquirer, resulting in its stockholders owning approximately 95% of the post-merger company[17][97] - The company's accumulated deficit of $49,600,593 and net loss of $5,938,044 for the six months ended June 30, 2025, raise substantial doubt about its ability to continue as a going concern[24] NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note details the key accounting principles applied, including the use of estimates, definitions of cash and restricted cash, accounts receivable and credit loss allowances, employee benefits, foreign currency translation, inventory valuation, revenue recognition, property, plant & equipment, stock compensation, and income taxes. It also mentions recent accounting pronouncements and the company's ongoing going concern considerations - Revenue is recognized in accordance with ASC606, typically upon transfer of control (delivery of the system), with deferred payment arrangements recognized at present value[49][53] - Stock-based compensation expense is measured at grant date fair value using a Black-Scholes model for options and average share price for Restricted Stock Units (RSUs), amortized over the vesting period[62][65] - The company adopted ASU No. 2023-07, Segment Reporting, retrospectively on December 31, 2024, and is evaluating the impact of ASU 2024-03 (Expense Disaggregation) and ASU 2023-09 (Income Tax Disclosures)[77][79][80] NOTE 3 – SEGMENT INFORMATION The company operates as a single reportable segment, focused on the SSi Mantra surgical robotic system and related instruments. While India remains the primary revenue source, international markets are expanding, and all long-lived assets are located in India - The company operates in one reportable segment: designing, manufacturing, and marketing the SSi Mantra surgical robotic system and its instruments[89][90] Revenue by Geographic Region (Six Months Ended June 30) | Region | 2025 Revenue (in $) | 2024 Revenue (in $) | | :------------ | :----------- | :----------- | | India | $11,612,248 | $7,638,754 | | Philippines | $1,435,817 | - | | Indonesia | $1,039,584 | - | | South America | $1,014,195 | - | | UAE | $14,849 | - | | Nepal | $4,222 | $508,065 | - As of June 30, 2025, and December 31, 2024, 100% of the company's long-lived assets were located in India[93] NOTE 4 – PROPERTY, PLANT AND EQUIPMENT, NET The company's net property, plant, and equipment significantly increased from December 2024 to June 2025, with 'Pay Per Use Systems' and 'Demo system' being major components. Depreciation expenses also rose during this period | Asset Category | June 30, 2025 (in $) | December 31, 2024 (in $) | | :---------------------- | :------------ | :---------------- | | Pay Per Use Systems | $5,279,397 | $3,374,228 | | Demo system | $1,363,176 | $1,128,305 | | Total (Net) | $8,274,135 | $5,385,955 | - Depreciation expenses for the six months ended June 30, 2025, were $469,243, up from $170,577 in the prior year[94] - Five systems were reclassified from inventory to property, plant, and equipment for demonstration purposes as of June 30, 2025[95] NOTE 5 – RECAPITALIZATION This note details the April 14, 2023, merger with CardioVentures, Inc., which was accounted for as a recapitalization. CardioVentures was deemed the accounting acquirer, resulting in its stockholders receiving approximately 95% of the post-merger common stock and 51% of the total voting power through Series A Preferred Shares - The merger with CardioVentures, Inc. on April 14, 2023, was accounted for as a recapitalization, with CardioVentures as the accounting acquirer[96][98] - CardioVentures' stockholders received 135,808,884 shares of SSII common stock (approx. 95% of post-merger shares) and 5,000 Series A Non-Convertible Preferred Stock, granting 51% of total voting power[97][101] - The company changed its name to "SS Innovations International, Inc." and implemented a one-for-ten reverse stock split as part of the merger[101] NOTE 6 – ACCOUNTS RECEIVABLE, NET Total accounts receivable, net, increased significantly from December 2024 to June 2025, with a substantial portion classified as non-current due to deferred payment terms. The allowance for credit losses also saw adjustments during the period | Metric | June 30, 2025 (in $) | December 31, 2024 (in $) | | :-------------------------- | :------------ | :---------------- | | Accounts receivable, net (current) | $5,973,923 | $4,466,047 | | Accounts receivable, net (non-current) | $4,447,389 | $3,299,032 | | Total Accounts Receivable, net | $10,421,312 | $7,765,079 | - The allowance for credit losses was $377,722 as of June 30, 2025, with additions/(reversals) of $(167,271) for the six months ended June 30, 2025[103] NOTE 7 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH The company's total cash, cash equivalents, and restricted cash significantly increased as of June 30, 2025. Restricted cash primarily consists of fixed deposits held as collateral for bank overdraft facilities and other guarantees | Metric | June 30, 2025 (in $) | December 31, 2024 (in $) | | :------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $11,375,265 | $466,500 | | Restricted cash (Current) | $5,884,513 | $5,838,508 | | Restricted cash (Non-current) | $345,900 | $318,527 | | Total Cash, cash equivalents and restricted cash | $17,605,678 | $6,623,535 | - Restricted cash includes fixed deposits serving as collateral for bank overdraft facilities and letters of credit/bank guarantees[106][108] NOTE 8 – PREPAID, CURRENT AND NON- CURRENT ASSETS The company's total prepaid and other current and non-current assets increased, with prepaid expenses for stock compensation representing unamortized portions of common stock granted to advisors for future services | Metric | June 30, 2025 (in $) | December 31, 2024 (in $) | | :------------------------------------ | :------------ | :---------------- | | Prepaid and other current assets | $9,292,684 | $6,438,338 | | Prepaid and other non-current assets | $3,103,405 | $3,341,528 | | Total prepaid, current and non-current assets | $12,396,089 | $9,779,866 | - Prepaid expenses for stock compensation represent the unamortized portion of common stock granted to advisors for services to be rendered in the future[108] NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accounts payable and total accrued expenses significantly increased as of June 30, 2025, compared to December 31, 2024, reflecting amounts due to vendors and various accrued liabilities | Metric | June 30, 2025 (in $) | December 31, 2024 (in $) | | :------------------------------------ | :------------ | :---------------- | | Accounts payable | $6,079,794 | $2,312,382 | | Accrued expenses & other current liabilities | $3,783,693 | $1,884,814 | | Total accounts payable, accrued current and non-current expenses | $9,975,367 | $4,272,013 | NOTE 10 – NOTES PAYABLE The company engaged in significant financing activities, raising $28 million in convertible notes from an affiliate in January 2025. Subsequently, $30 million of convertible notes, including interest, were converted into common stock in February and March 2025, while other promissory notes were repaid - In January 2025, the company raised $28,000,000 from an affiliate by issuing One-Year 7% Convertible Promissory Notes, convertible at $1.38 per share[115] - In February and March 2025, convertible notes totaling $30,000,000 (plus accrued interest) were converted into 21,858,368 common shares of the company[117][118][213] - The company repaid $4,212,637 in promissory notes to Sushruta Pvt Ltd. and $1,068,849 to Andrew Economos in February 2025[116] NOTE 11 – BANK OVERDRAFT FACILITY The company utilizes bank overdraft facilities from HDFC Bank, collateralized by fixed deposits and personal guarantees from Dr. Sudhir Prem Srivastava. The total overdraft balance decreased slightly, and the company remained in compliance with all covenants | Metric | June 30, 2025 (in $) | December 31, 2024 (in $) | | :----------------- | :------------ | :---------------- | | Bank overdraft | $6,980,313 | $7,994,906 | - Overdraft facilities are secured by fixed deposits, current assets, plant and machinery, and personal guarantees from Dr. Sudhir Prem Srivastava[120][121] - Interest rates for the overdraft facilities are 9.50% per annum for working capital and 1.25% over the prevailing fixed deposit rate for fixed deposit-backed overdrafts[122] NOTE 12 – DEFERRED REVENUE Deferred revenue, representing advance billings and unearned income from warranty sales, increased significantly. The company sold 24 surgical robotic systems in the six months ended June 30, 2025, and recognized interest income from deferred financing components | Metric | June 30, 2025 (in $) | December 31, 2024 (in $) | | :------------------------------------ | :------------ | :---------------- | | Deferred revenue- end of period | $8,192,207 | $6,452,555 | | Deferred revenue expected to be recognized in: | | | | One year or less | $2,412,682 | $1,278,602 | | More than one year | $5,779,525 | $5,173,953 | - The company sold twenty-four surgical robotic systems during the six months ended June 30, 2025[124] - Interest income of $150,338 was recorded from the deferred financing component of system sales for the six months ended June 30, 2025[125] NOTE 13 – STOCKHOLDERS' EQUITY This note details the company's common and preferred stock, including the increase in outstanding common shares due to the conversion of notes payable and issuances for advisory services and employee incentives. It also outlines the voting rights and other characteristics of the shares - As of June 30, 2025, there were 193,588,410 common shares outstanding, an increase from 171,579,284 shares as of December 31, 2024[130] - Significant common stock issuances occurred in February and March 2025, including 16,046,814 shares for $22,144,603 in notes and 5,811,554 shares for $8,019,945 in notes, both from Sushruta Pvt Ltd[138][139] - The company has 1,000 Series A Preferred Shares outstanding, which entitle holders to 51% of the total voting power[132][101] NOTE 14 – INVENTORY The company's inventory, comprising raw materials, work-in-progress, and finished goods, significantly increased from December 2024 to June 2025, reflecting growth in its operational scale | Inventory Category | June 30, 2025 (in $) | December 31, 2024 (in $) | | :----------------- | :------------ | :---------------- | | Raw materials | $8,076,774 | $4,461,898 | | Work-in-progress | $947,290 | $1,436,250 | | Finished goods | $9,236,077 | $4,308,750 | | Total Inventory | $18,260,141 | $10,206,898 | NOTE 15 – LEASES This note details the company's operating lease agreements for its facilities in India, showing a slight increase in both right-of-use assets and lease liabilities. It also provides a maturity schedule for lease liabilities and the weighted-average discount rates used | Metric | June 30, 2025 (in $) | December 31, 2024 (in $) | | :------------------------------------ | :------------ | :---------------- | | Right of use operating lease assets | $2,654,775 | $2,623,880 | | Total lease liabilities | $2,807,015 | $2,758,636 | | Operating cash outflows for operating leases (Six months ended June 30) | $407,188 | $342,202 | - The weighted average discount rate for most operating leases is 12.00%[146] Maturities of Lease Liabilities (as of June 30, 2025) | Fiscal Year | Amount (in $) | | :---------- | :------------ | | 2025 | $338,597 | | 2026 | $660,350 | | 2027 | $686,994 | | 2028 | $714,970 | | 2029 | $744,345 | | 2030 and thereafter | $722,835 | NOTE 16 – INCOME TAX The company recorded income tax expense for the first time in 2025, primarily due to its Indian subsidiary generating taxable income and utilizing previously unrecognized deferred tax assets. A full valuation allowance is maintained against U.S. deferred tax assets due to ongoing losses - Income tax expense for the six months ended June 30, 2025, was $353,729, compared to nil in the prior-year period, with an effective tax rate of (6.33%)[148][154] - The Indian subsidiary generated positive taxable income, leading to current tax expense of $719,370 and a deferred tax benefit of $365,641[151] - A valuation allowance of $10,414,969 was recorded against U.S. federal and state deferred tax assets due to U.S. operations continuing to generate losses[150][155] NOTE 17 – EMPLOYEE BENEFIT PLAN This note describes the company's unfunded Gratuity Plan in India, a defined benefit plan. The projected benefit obligation and net gratuity cost increased, with actuarial losses driven by changes in actuarial assumptions | Metric | June 30, 2025 (in $) | December 31, 2024 (in $) | | :------------------------------------ | :------------ | :---------------- | | Projected benefit obligation at end | $124,765 | $80,833 | | Unfunded status in the end | $124,765 | $80,833 | - Net gratuity cost for the six months ended June 30, 2025, was $24,200, up from $13,734 in the prior year[158] - The Gratuity Plan is unfunded, and the company does not make contributions to plan assets[157] NOTE 18 – FAIR VALUE MEASUREMENT – FINANCIAL INSTRUMENTS The company's financial instruments are measured using a fair value hierarchy. Financial assets and liabilities carried at fair value primarily use Level III unobservable inputs, while most other instruments approximate their carrying amounts due to short-term maturities - Financial instruments not carried at fair value, such as cash, accounts receivable, and notes payable, approximate their carrying amounts due to their short-term maturities[162] Level III Financial Assets and Liabilities (June 30, 2025) | Category | Carrying Value (in $) | | :------------------------ | :------------- | | Account receivables, net | $4,447,389 | | Other non-current financial assets | $191,640 | | Lease liabilities | $2,452,389 | NOTE 19 – STOCK COMPENSATION EXPENSES Stock compensation expenses significantly decreased for the six months ended June 30, 2025, primarily due to reversals related to resigned employees. The company grants stock options, restricted stock awards (RSAs) to employees, and advisory shares to consultants, with fair values estimated using the Black-Scholes-Merton model | Stock Compensation Type | Six Months Ended June 30, 2025 (in $) | Six Months Ended June 30, 2024 (in $) | | :---------------------- | :----------------------------- | :----------------------------- | | Stock options | $1,429,884 | $6,094,592 | | Restricted stock units (RSU) | $1,938,783 | $2,780,358 | | Advisory shares | $640,840 | $677,592 | | Total stock compensation expenses | $4,009,507 | $9,552,542 | - The substantial decrease in stock compensation expense in 2025 is primarily due to the reversal of expenses relating to resigned employees[192][203] - As of June 30, 2025, total unrecognized compensation expense for unvested stock options and RSUs was $17,631,681, expected to be recognized over a weighted-average period of 2.41 years[175] NOTE 20 – RELATED PARTY This note details transactions and outstanding balances with related parties, including significant financing from Sushruta Private Limited (an affiliate of the CEO), which provided $28 million in convertible notes and subsequently converted over $30 million into common stock during the six months ended June 30, 2025 - Sushruta Private Limited provided $28,000,000 in proceeds from notes issued during the six months ended June 30, 2025[176] - Sushruta Private Limited converted $30,164,548 of notes (including interest) into common stock during the six months ended June 30, 2025[176] Key Related Party Balances (June 30, 2025) | Particulars | As on June 30, 2025 (in $) | | :------------------------------ | :------------------ | | Accrued expenses & other current liabilities: Barry F. Cohen | $(408,753) | | Prepaid & Other current assets: Sudhir Prem Srivastava | $2,039,629 | NOTE 21 – COMMITMENTS The company has various lease commitments for office, manufacturing, assembly, and warehouse spaces in Gurugram, India, with agreements extending to March 2030 and May 2032, including new leases signed in 2024 and 2025 - The company has multiple lease agreements for facilities in Gurugram, Haryana, India, with monthly payments ranging from $3,502 to $24,675[178] - Lease expiration dates range from March 2030 to May 2032, with new agreements signed in August 2024 and May 2025 for additional space[178] NOTE 22 – SUBSEQUENT EVENTS No adjusting subsequent events have been identified by the company as of the reporting date - No adjusting subsequent event(s) has been identified[179] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, highlighting significant improvements in revenue and gross profit, a reduction in net loss, and ongoing efforts to address liquidity and internal control weaknesses. It also reiterates the going concern uncertainty Introduction The company is engaged in developing, manufacturing, and selling the SSi Mantra surgical robotic system and SSi Mudra instruments, having commenced commercial sales in late 2022 and expanded globally in 2024. Its manufacturing operations in India provide significant cost advantages - The company develops, manufactures, and sells the SSi Mantra surgical robotic system and SSi Mudra surgical instruments[181] - Commercial sales began in the second half of 2022, with expansion into global markets in 2024[181] - Manufacturing operations in India provide significant operating cost advantages, contributing to the affordability of its surgical robotic system[183] - The company sold 8 surgical robotic systems during the three months and 25 systems during the six months ended June 30, 2025[184] Results of Operations The company demonstrated substantial financial improvement for both the three and six months ended June 30, 2025, compared to 2024, with significant increases in total revenue and gross profit, and a notable reduction in net loss. These improvements were driven by increased sales, lower raw material prices, and manufacturing efficiencies, despite higher SG&A expenses and the recognition of income tax Three Months Ended June 30, 2025 vs 2024 | Metric | June 30, 2025 (in $) | June 30, 2024 (in $) | Change (%) | | :-------------------------------- | :------------ | :------------ | :--------- | | Total Revenue | $10,000,305 | $4,509,126 | 121.7% | | Gross Profit | $5,915,058 | $1,437,786 | 311.4% | | Research & development expense | $498,600 | $759,004 | (34.3%) | | Stock compensation expense | $1,630,295 | $2,443,792 | (33.3%) | | Selling, general and administrative expense | $3,428,788 | $2,244,703 | 52.8% | | Net Loss | $(256,691) | $(4,140,570) | (93.8%) | Six Months Ended June 30, 2025 vs 2024 | Metric | June 30, 2025 (in $) | June 30, 2024 (in $) | Change (%) | | :-------------------------------- | :------------ | :------------ | :--------- | | Total Revenue | $15,120,915 | $8,146,819 | 85.6% | | Gross Profit | $7,002,266 | $2,165,968 | 223.3% | | Research & development expense | $1,508,695 | $1,286,995 | 17.2% | | Stock compensation expense | $4,009,507 | $9,552,542 | (58.0%) | | Selling, general and administrative expense | $6,638,587 | $5,088,362 | 30.5% | | Net Loss | $(5,938,044) | $(13,982,323) | (57.5%) | - Income tax expense of $353,729 was recognized for the first time in 2025 due to the Indian operations generating taxable profits[197][207] Liquidity and Capital Resources The company requires substantial funds for scaling operations and R&D, having successfully raised capital through convertible notes, primarily from its principal shareholder. Despite these efforts, the lack of committed funding sources continues to raise substantial doubt about its ability to continue as a going concern - The company needs substantial funds for scaling operations, capital expenditure, and research and development[209] - During the six months ended June 30, 2025, the company received $28,000,000 from its principal shareholder (Sushruta Pvt Ltd.) through convertible notes, and subsequently converted $30,000,000 of these notes into common stock[212][213][221] - Net cash provided by financing activities was $21,703,921 for the six months ended June 30, 2025[221] - The absence of committed funding sources raises substantial doubt about the company's ability to continue as a going concern[215][223] Critical Accounting Policies This section highlights critical accounting policies that involve significant management judgment, specifically the fair value measurement of stock options and the determination of standalone selling prices for bundled revenue contracts - Critical accounting policies requiring significant management judgment include the fair value of stock options and the standalone selling price in bundled revenue contracts[225] - The fair value of stock-based awards is determined using the Black-Scholes option-pricing model, requiring estimates of expected term and stock volatility[228][229] - Standalone selling prices for multiple-element arrangements are estimated considering market conditions, historical pricing, and product features when not directly observable[231] Off-Balance Sheet Arrangements The company reported no material off-balance sheet arrangements that would significantly affect its financial condition or results of operations - There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on the company's financial condition, revenues, or liquidity[233] Item 3. Quantitative and Qualitative Disclosures About Market Risk. This section states that there are no quantitative and qualitative disclosures about market risk applicable to the company - This item is not applicable to the company[234] Item 4. Controls and Procedures The company's disclosure controls and procedures were deemed ineffective as of June 30, 2025, due to material weaknesses in internal control over financial reporting. The company is actively implementing a remediation plan, including engaging external experts and deploying a new ERP system Disclosure Controls and Procedures The Chief Executive Officer and Interim Chief Financial Officer determined that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses, including improper application of U.S. GAAP, lack of written internal control documentation, and insufficient segregation of duties - Disclosure controls and procedures were not effective as of June 30, 2025[237] - Material weaknesses include failure to properly apply U.S. GAAP (e.g., revenue recognition, lease liabilities), lack of written internal control policies, and insufficient segregation of duties[241] Remediation Plan The company is actively remediating material weaknesses by enhancing review processes for significant transactions, engaging external experts for financial reporting and internal control guidance, and implementing a comprehensive cloud-based ERP system to integrate business functions - The company is enhancing the review process for significant transactions to ensure proper accounting treatment[237] - External experts have been engaged to provide guidance on financial reporting, internal controls, and enterprise risk management, and to strengthen existing internal controls and SOPs[237] - A comprehensive cloud-based ERP system is being designed, developed, and implemented to integrate all business functions within the accounting and financial department[238] Changes in Internal Controls Over Financial Reporting Aside from the described remediation efforts, there were no other material changes in the company's internal controls over financial reporting during the fiscal quarter - Except for the remediation efforts, no other changes in internal controls over financial reporting materially affected or are reasonably likely to materially affect internal control over financial reporting during the fiscal quarter[240] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company may be involved in various lawsuits and legal proceedings in the ordinary course of business, acknowledging the inherent uncertainties and potential adverse impacts on its operations - The company may become involved in various lawsuits and legal proceedings arising in the ordinary course of business[243] - Litigation is subject to inherent uncertainties, and an adverse result could harm the company's business[243] Item 1A. Risk Factors. This section states that there are no new risk factors to report - Not Applicable[244] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. The company reported no unregistered sales of equity securities or use of proceeds for the period - None[246] Item 3. Defaults Upon Senior Securities. The company reported no defaults upon senior securities for the period - None[247] Item 4. Mine Safety Disclosures. This section states that mine safety disclosures are not applicable to the company - Not applicable[249] Item 5. Other Information. The company reported no other information for the period - None[249] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including Section 302 and 906 certifications from the Chief Executive Officer and Chief Financial Officer, as well as Inline XBRL documents Exhibits Filed | Exhibit No. | Description of Exhibit | | :---------- | :--------------------- | | 31.1 | Section 302 Certification – Chief Executive Officer | | 31.2 | Section 302 Certification – Chief Financial Officer | | 32.1 | Section 906 Certification – Chief Executive Officer | | 32.2 | Section 906 Certification – Chief Financial Officer | | 101.INS* | Inline XBRL Instance Document | | 104* | Cover Page Interactive Data File | SIGNATURES The report is duly signed on behalf of SS Innovations International, Inc. by Vishwajyoti P. Srivastava, M.D., in his capacity as Chief Executive Officer – Asia Pacific and Interim Chief Financial Officer - The report was signed by Vishwajyoti P. Srivastava, M.D., Chief Executive Officer – Asia Pacific and Interim Chief Financial Officer, on August 6, 2025[254]