Revenue surges but SS Innovations (NASDAQ: SSII) warns on going concern
SS Innovations International, Inc. reported strong top-line growth but continued losses for the three months ended March 31, 2026. Revenue rose to $11,101,366 from $5,120,610 a year earlier, driven mainly by higher system sales.
The company posted a net loss of $3,582,571, improving from a $5,681,353 loss, with results heavily affected by non-cash stock compensation of $3,144,315 and depreciation of $323,747. Cash, cash equivalents and restricted cash increased to $24,005,680, helped by a private placement that generated net proceeds of $18,446,498.
Despite a working capital surplus of $40,216,514, management disclosed that recurring losses, dependence on related-party funding, and insufficient projected cash flows raise substantial doubt about the company’s ability to continue as a going concern over the next 12 months, absent additional financing and successful execution of growth plans.
Positive
- None.
Negative
- Going concern risk: Despite higher revenue and increased cash, management concludes that recurring losses, funding dependence and projected cash shortfalls raise substantial doubt about the company’s ability to continue as a going concern over the next 12 months.
Insights
Rapid revenue growth is offset by ongoing losses and a formal going-concern warning.
SS Innovations International nearly doubled quarterly revenue to $11,101,366 from $5,120,610, mainly on higher SSi Mantra system sales and related instruments. Gross profit improved to $5,327,221, indicating better scale on manufacturing and deployment.
However, the company still reported a net loss of $3,582,571, with sizeable non-cash stock compensation of $3,144,315. Operating cash outflow was $2,311,936, partially offset by $18,446,498 of net proceeds from a private placement, lifting total cash and restricted cash to $24,005,680.
Management explicitly states that recurring losses, reliance on related parties and current cash projections raise “substantial doubt” about continuing as a going concern for one year from issuance. Future filings for periods after March 31, 2026 will be important to see whether additional financing and revenue growth ease this risk.
Key Figures
Key Terms
going concern financial
sales-type leases financial
deferred revenue financial
restricted cash financial
stock-based compensation financial
Earnings Snapshot
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
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Indicate by check mark whether the registrant
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the preceding 12 months (or for such shorter period that the Registrant was required to submit such files.)
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 “accelerated filer”, “large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
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
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There were
Unless the context otherwise requires, as used in this Quarterly Report on Form 10-Q (this “Quarterly Report”) the terms “SSi,” “the Company,” “we,” “us,” and “our” refer to SS Innovations International, Inc., and where appropriate, our subsidiaries.
Forward Looking Statements
This Quarterly Report contains statements that are not historical facts and are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “will,” “intend,” “may,” “plan,” “project,” “should,” “could,” “seek,” “designed,” “potential,” “forecast,” “target,” “objective,” “goal,” or the negatives of such terms or other similar expressions to identify such forward-looking statements. These statements relate to future events or SSi’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
These statements are not guarantees of future performance and are subject to numerous risks, uncertainties, and assumptions that are difficult to predict.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission (the “SEC”), we do not assume any obligation to update any forward-looking statement. We disclaim any intention or obligation to update or revise any forward-looking statement contained herein, whether as a result of new information, future events or otherwise.
TABLE OF CONTENTS
| Page | |||
| PART I – FINANCIAL INFORMATION | 1 | ||
| Item 1. | Financial Statements | 1 | |
| Condensed Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025 | 1 | ||
| Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2026 (unaudited) and March 31, 2025 (unaudited) | 2 | ||
| Condensed Consolidated Statements of Stockholders’ equity for the three months ended March 31, 2026 (unaudited) and March 31, 2025 (unaudited) | 3 | ||
| Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 (unaudited) and March 31, 2025 (unaudited) | 4 | ||
| Notes to Condensed Consolidated Financial Statements (unaudited) | 5 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 37 | |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 42 | |
| Item 4. | Controls and Procedures | 43 | |
| PART II – OTHER INFORMATION | 44 | ||
| Item 1. | Legal Proceedings | 44 | |
| Item 1A. | Risk Factors. | 44 | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 44 | |
| Item 3. | Defaults Upon Senior Securities. | 44 | |
| Item 4. | Mine Safety Disclosures. | 44 | |
| Item 5. | Other Information. | 44 | |
| Item 6. | Exhibits | 44 | |
| SIGNATURES | 45 | ||
i
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
SS INNOVATIONS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| As of | ||||||||||
| Notes | March 31, 2026 | December 31, 2025 | ||||||||
| (Unaudited) | ||||||||||
| ASSETS | ||||||||||
| Current Assets: | ||||||||||
| Cash and cash equivalents | 7 | $ | $ | |||||||
| Restricted cash | 7 | |||||||||
| Accounts receivable, net | 6 | |||||||||
| Inventory | 14 | |||||||||
| Prepaids and other current assets | 8 | |||||||||
| Total Current Assets | ||||||||||
| Property, plant, and equipment, net | 4 | |||||||||
| Right of use asset, net | 15 | |||||||||
| Deferred tax assets, net | 16 | |||||||||
| Accounts receivable, net-non current | 6 | |||||||||
| Restricted cash- non current | 7 | |||||||||
| Prepaids and other non current assets | 8 | |||||||||
| Total Assets | $ | $ | ||||||||
| LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||||
| Current Liabilities | ||||||||||
| Bank overdraft facility | 11 | $ | $ | |||||||
| Current portion of operating lease liabilities | 15 | |||||||||
| Accounts payable | 9 | |||||||||
| Deferred revenue | 12 | |||||||||
| Accrued expenses & other current liabilities | 9 | |||||||||
| Total Current Liabilities | ||||||||||
| Operating lease liabilities, less current portion | 15 | |||||||||
| Deferred Revenue- non current | 12 | |||||||||
| Other non current liabilities | 9 | |||||||||
| Total Liabilities | $ | $ | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders’ equity: | ||||||||||
| Preferred stock, authorized | 13 | |||||||||
| Common stock, | 13 | |||||||||
| Accumulated other comprehensive income (loss) | 13 | ( | ) | ( | ) | |||||
| Additional paid in capital | 13 | |||||||||
| Capital reserve | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Total stockholders’ equity | ||||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||||
See accompanying notes to Condensed Consolidated Financial Statements
1
SS INNOVATIONS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| For The Three months ended | ||||||||||
| Notes | March 31, 2026 | March 31, 2025 | ||||||||
| REVENUES | ||||||||||
| System sales | 12 | |||||||||
| Instruments sale | 12 | |||||||||
| Warranty sale | 12 | |||||||||
| Lease income | 12 | |||||||||
| Total revenue | $ | $ | ||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||
| GROSS PROFIT | ||||||||||
| OPERATING EXPENSES: | ||||||||||
| Research & development expense | ||||||||||
| Stock compensation expense | 19 | |||||||||
| Depreciation and amortization expense | 4 | |||||||||
| Selling, general and administrative expense | ||||||||||
| TOTAL OPERATING EXPENSES | ||||||||||
| Loss from operations | ( | ) | ( | ) | ||||||
| OTHER INCOME (EXPENSE): | ||||||||||
| Interest Expense | ( | ) | ( | ) | ||||||
| Interest and other income, net | ||||||||||
| TOTAL INCOME, NET | ||||||||||
| LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ||||||
| Income tax expense | 16 | - | ||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share - basic and diluted | 2(r) | $ | ( | ) | $ | ( | ) | |||
| Weighted average- basic shares | 2(r) | |||||||||
| Weighted average- diluted shares | 2(r) | |||||||||
| CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS | ||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||||
| OTHER COMPREHENSIVE INCOME (LOSS): | ||||||||||
| Foreign currency translation loss | ( | ) | ||||||||
| Retirement Benefit | 17 | |||||||||
| RECLASSIFICATION ADJUSTMENTS: | ||||||||||
| Retirement Benefit (1) | - | |||||||||
| Income tax effects relating to retirement benefit | 16 | ( | ) | - | ||||||
| TOTAL OTHER COMPREHENSIVE LOSS | ( | ) | ||||||||
| TOTAL COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | ||||
| (1) |
See accompanying notes to Condensed Consolidated Financial Statements.
2
SS INNOVATIONS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND MARCH 31, 2025
(Unaudited)
| Preferred Stock | Common Stock | Accumulated other comprehensive | Additional Paid-In | Capital | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||||||||||
| Notes | Number | Amount | Number | Amount | income (loss) | Capital | Reserve | Deficit | equity | |||||||||||||||||||||||||||||
| Balance as at December 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Proceeds from Private investment in Public Equity, net of issuance costs | 13 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Stock compensation | 19 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Stock grants | 13 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( | ) | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance as at March 31, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance as at December 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Stock compensation | 19 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Common stock issued against exercise of warrants | 13 | - | - | - | ( | ) | - | - | - | |||||||||||||||||||||||||||||
| Conversion of notes payable to equity | 10 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance as at March 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
See accompanying notes to Condensed Consolidated Financial Statements.
3
SS INNOVATIONS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For The Three months ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Operating lease expense | ||||||||
| Interest Expense | ||||||||
| Interest and other income, net | ( | ) | ( | ) | ||||
| Deferred income tax benefit | ( | ) | - | |||||
| Stock compensation expense | ||||||||
| Provision for / (Reversal of) credit loss reserve, net | ( | ) | ||||||
| Provision for slow moving inventory | ( | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ( | ) | ||||||
| Inventory, net | ( | ) | ||||||
| Deferred revenue | ||||||||
| Prepaids and other assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Income taxes payable, net | - | |||||||
| Accrued expenses & other liabilities | ||||||||
| Operating lease payment | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from bank overdraft facility (net) | ( | ) | ( | ) | ||||
| Proceeds from Private Investment in Public Equity, net of transaction costs | - | |||||||
| Proceeds from issuance of convertible notes to principal shareholder | - | |||||||
| Repayment of convertible notes to principal shareholder, including interest | - | ( | ) | |||||
| Repayment of convertible notes to other investors, including interest | - | ( | ) | |||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ||||||||
| Effect of exchange rate on cash | ( | ) | ||||||
| Cash and cash equivalents at the beginning of the year | ||||||||
| Cash and cash equivalents at end of the year | $ | $ | ||||||
| ^ For cash and cash equivalents and restricted cash, refer Note 7 | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Transaction Costs relating to Private Investment in Public Equity | $ | $ | - | |||||
| Conversion of convertible notes into common stock, including interest | $ | - | $ | |||||
| Transfer of systems from inventory to property, plant and equipment | $ | - | $ | |||||
See accompanying notes to Condensed Consolidated Financial Statements.
4
SS INNOVATIONS INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – FINANCIAL STATEMENTS
Organization
SS Innovations International, Inc. (the “Company”
or “SSII”) was incorporated as AVRA Surgical Microsystems, Inc. in the State of Florida on
On April 14, 2023, a wholly owned subsidiary
of the Company, AVRA-SSI Merger Corporation (“Merger Sub”) merged with CardioVentures, Inc., a Delaware corporation
(“CardioVentures”), the indirect parent of Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company
engaged in the business of developing innovative surgical robotic technologies. As a result of the transaction, a “change in
control” of the Company took place. In addition, among other matters, the Company changed its name to “SS Innovations
International, Inc.” and implemented a
The Transaction was accounted for as a recapitalization in accordance with GAAP (the “Recapitalization”). Under this method, AVRA was treated as the “acquired” company (the “Accounting Acquiree”) and Cardio Ventures Inc., the accounting acquirer, was assumed to have issued stock for the net assets of AVRA, accompanied by a recapitalization. Accordingly, for the year ended December 31, 2022, CardioVentures has been considered the ultimate holding company. Prior to October 18, 2022, Cardio Ventures Pvt Ltd., Bahamas (Cardio Bahamas), was in existence and served as the ultimate holding company. On October 18, 2022, Cardio Ventures Inc. acquired controlling interest in Otto Pvt Ltd. from Cardio Bahamas, making Cardio Ventures Inc. the ultimate holding company.
Effective April 25, 2025, the Company’s common stock was uplisted to the Nasdaq Stock Market LLC (“NASDAQ”), where it is listed for trading on the NASDAQ Capital Market under the ticker symbol “SSII”.
Basis of Presentation
Unaudited Interim Condensed Consolidated Financial Statements
The interim condensed consolidated balance sheet as of March 31, 2026, and the interim condensed consolidated statement of operations, comprehensive loss and stockholders’ equity for the three months ended March 31, 2026 and March 31, 2025 and flows for the three months ended March 31, 2026 and March 31, 2025 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of our financial position as of March 31, 2026 and our results of operations for the three months and cash flows for the three months ended March 31, 2026 and March 31, 2025.
The financial data and other financial information disclosed in these notes to the interim condensed consolidated financial statements related to the three months are also unaudited. The interim condensed consolidated results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future annual or interim period. The condensed consolidated balance sheet as of December 31, 2025 included herein was produced from the audited consolidated financial statements as of that date. These interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2025 as filed by us with the SEC on March 10, 2026 and the Amendment included in the Form 10-K/A as filed by us with the SEC on March 31, 2026.
The interim condensed consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying condensed financial statements have been prepared on a consolidated basis and reflect the condensed consolidated financial statements of the Company and all of its subsidiaries.
The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis. Intra-group balances and transactions, and gains and losses arising from intra-group transactions, are eliminated while preparing condensed consolidated financial statements.
Accounting policies of the respective individual subsidiaries are aligned wherever necessary, so as to ensure consistency with the accounting policies that are adopted by the Company under U.S. GAAP.
Principles of Consolidation
The consolidated financial statements include our accounts and all majority-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The Company follows a monthly reporting calendar, with its fiscal year ending on December 31.
Reclassifications
Certain prior period amounts have been reclassified to conform with the current presentation period.
5
Going Concern
The accompanying condensed consolidated financial
statements have been prepared on a going concern basis which implies the Company will continue to meet its obligations for the next 12
months as of the date these financial statements are issued. The Company had a working capital surplus of $
On March 6, 2026 (the “Closing Date”),
the Company completed a private placement of its common stock which generated net proceeds of $
In the offering, we offered and sold a total
of
| ● | an aggregate of |
| Ø |
| Ø |
| Ø |
| ● | an aggregate of |
SSi intends to use the net proceeds from this private placement for working capital and other general corporate purposes, which include, but are not limited to advancing the Company’s our growth initiatives in India and other existing global markets and supporting preparation for entry into the United States and European Union markets.
However, the Company’s existing cash resources and income from operations are not expected to provide sufficient funds to carry out the Company’s operations and business development through the next twelve (12) months. The management of the Company is making efforts to raise further funding to scale up operations and meet its longer-term capital needs. While management of the Company believes that it will be successful in its capital formation and planned expansion of its operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in generating additional revenues and ultimately achieving profitability. The accompanying condensed consolidated 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.
6
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
| a) | Use of Estimates |
The preparation of condensed consolidated 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, 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management. Significant estimates include fair value of stock options and standalone selling price in case of bundled revenue contracts.
| b) | Cash and Cash Equivalents |
The Company considers all highly liquid investments purchased with an original maturity of ninety days or less to be cash equivalents.
| c) | Restricted Cash |
Restricted cash includes any cash and cash equivalents that are legally restricted as to withdrawal or usage for the Company’s operations. For the purposes of the condensed consolidated statement of cash flows, the Company includes in its cash and cash-equivalent balances those amounts that have been classified as restricted cash and restricted cash equivalents.
| d) | Accounts Receivable and Allowance for Expected Credit Losses |
The Company’s account receivables are due from customers relating to contracts to supply surgical robotic systems, instruments, and accessories and to provide post sales warranty/maintenance services. The Company also sells surgical robotic systems under deferred payment arrangements and in such cases, the amounts due and recoverable beyond the one year period at the balance sheet date are classified as long-term receivables. Collateral is currently not required. The Company also maintains credit loss allowance for estimated losses resulting from the inability of the Company’s customers to make payments. The Company periodically reviews these estimated allowances, including an analysis of the customers’ payment history and creditworthiness, the age of the trade receivable balances and current economic conditions that may affect a customer’s ability to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically reserves for those accounts deemed uncollectible or likely to become uncollectible. When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance.
| e) | Employee Benefits |
Contributions to defined contribution plans are charged to the condensed consolidated statement of operations and comprehensive loss in the period in which services are rendered by the covered employees. Current service costs for defined benefit plans are recognized in the period to which they relate. The liability in respect of defined benefit plans is calculated annually by the Company using the projected unit credit method. The Company records annual amounts relating to its defined benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, future compensation increases and attrition rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in other comprehensive income (loss) (“OCI”) and amortized to net periodic benefit cost over the expected remaining period of service of the covered employees using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. These assumptions may not be within the control of the Company and accordingly it is reasonably possible that these assumptions could change in future periods. The Company includes the service cost component of the net periodic benefit cost in the same line item or items as other compensation costs arising from services rendered by the respective employees during the period. The interest cost, expected return on plan assets and amortization of actuarial gains/loss, are included in “Other income/(expense), net”. Refer to Note 17 - Employee Benefit Plans to the unaudited interim condensed consolidated financial statements for details.
7
| f) | Foreign Currency Translation |
The Company’s reporting currency is U.S.
dollars. The functional currency of the Company is the U.S. dollar. The functional currency of the Company’s subsidiary in India
is Indian National Rupee (“INR”). Transactions denominated in INR are translated to U.S. dollars at rates which approximate
those in effect on the transaction dates. Monetary assets and all liabilities denominated in foreign currencies on March 31, 2026 and
March 31, 2025 are translated at the exchange rate in effect as of those dates. Stockholders’ equity is translated at the appropriate
historical rates. Included in interest and other income foreign exchange gain resulting from such translations of approximately $
The functional currency of each entity in the group is the currency of the primary economic environment in which it operates. Transactions in foreign currencies are initially recorded into functional currency at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured into functional currency at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are remeasured to the functional currency at exchange rates that prevailed on the date of inception of the transaction. All foreign exchange gains and losses arising on re-measurement are recorded in the Company’s condensed consolidated statement of operations and comprehensive loss.
The assets and liabilities of the subsidiaries for which the functional currency is other than the U.S. dollar are translated into U.S. dollars, the reporting currency, at the rate of exchange prevailing on the balance sheet date. Revenues and expenses are translated into U.S. dollars at the exchange rates prevailing on the last business day of each month, which approximates the average monthly exchange rate. Share capital and other equity items are translated at exchange rates that prevailed on the date of inception of the transaction. Resulting translation adjustments are included in “Accumulated other comprehensive income/(loss)” in the condensed consolidated balance sheet.
The relevant translation rates are as follows:
for the three months ended March 31, 2026 closing rate at
The relevant translation rates are as follows:
for the three months ended March 31, 2025 closing rate at
The relevant translation rates are as follows:
for the year ended December 31, 2025 closing rate at
| g) | Inventory |
The Company’s inventory consists of finished goods in the form of fully assembled and tested surgical robotic system, semi-finished goods in the form of various sub-systems of the surgical robotic systems in various stages of assembly and manufacturing and raw material in the form of various mechanical, electrical, and other material components, parts, motors, encoders etc. which are not yet assembled/manufactured. The inventory is valued at the lower of cost (first-in, first-out) or estimated net realizable value.
| h) | Cost of Sales |
Cost of sales primarily consists of manufacturing cost incurred for production of the Mantra System and the related instruments and accessories which are used to facilitate the use of the Mantra System. Further, Cost of sales also includes other costs such as salaries and rent which are directly attributable to the manufacturing process.
| i) | Selling and Administrative Expenses |
Selling and administrative expenses primarily consist of indirect expenses which are not directly attributable to any other identified expense category of the Company.
8
| j) | Fair value measurements |
ASC Topic 820, Fair Value Measurements and Disclosures defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability as against assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company’s own credit risk. The fair value hierarchy consists of the following three levels:
| ● | Level I — Quoted prices for identical instruments in active markets. |
| ● | Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
| ● | Level III — Instruments whose significant value drivers are unobservable. |
| k) | Concentration of Credit Risk |
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. and cash equivalents, time deposits and accounts receivable. By their nature, all such financial instruments involve risks including the credit risks of non-performance by counterparties. The surplus funds are maintained as cash and cash equivalents and time deposits, placed with highly rated financial institutions to reduce its exposure to market risk with regard to these funds. The Company’s exposure to credit risk on account receivable is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. To mitigate this risk the Company evaluates the creditworthiness of its customers in conjunction with its revenue recognition processes as well as through its ongoing collectability assessment processes for accounts receivable. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
| l) | Commitments and Contingencies |
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recognized when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. A disclosure for a contingent liability is made when there is a possible obligation that may require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Legal costs incurred in connection with such liabilities are expensed as incurred. Capital commitments are disclosed in the condensed consolidated financial statements.
| m) | Revenue Recognition |
The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized:
| ● | Identification of a contract with a customer or placement of a purchase order by the customer. |
| ● | Identification of the performance obligations in the contract or the purchase order as the case may be. |
| ● | Determination of the transaction price which is reflected in the purchase order placed by the customer. |
| ● | Allocation of the transaction price to the performance obligations in the contract; and |
| ● | Recognition of revenue when or as the performance obligations are satisfied as per the terms of the purchase order received from the customer. |
The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Product type and payment terms vary by client.
9
| System | Sales: |
The Company recognizes revenue when the “transfer of control” occurs, which typically takes place upon the delivery of the system to the customer. In cases where a deferred payment arrangement exists, revenue is recognized at the present value of the consideration receivable, adjusted by the present value of any extended warranty obligations.
Standalone Selling Price:
Our system sale arrangements contain multiple products and services, including system, accessories, instruments and services. Other than services, we generally deliver all of the products upfront. Each of these products and services is a distinct performance obligation. System, instruments, accessories and services are also sold on a standalone basis. For multiple-element arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices at which we separately sell the products or services. If a standalone selling price is not directly observable, then we estimate the standalone selling prices considering market conditions and entity-specific factors including, but not limited to, historical pricing data, features and functionality of the products and services and industry benchmark. We regularly review standalone selling prices and maintain internal controls over establishing and updating these estimates. Revenue that is allocated to the service obligation is deferred and recognized ratably over the service period upon expiration of first year of service which is free and included in the system sale arrangements.
Key Terms of Customer Contracts
The Company enters into binding contracts with customers through either an agreement or a sales order, with all terms and conditions mutually agreed upon by both parties. The key terms and conditions include:
| 1. | Finalization of Product and Price: Agreement on the specific model of the “SSI Mantra” system and its selling price. |
| 2. | Payment Terms: Determination of payment terms, which may involve either a deferred payment arrangement or a one-time payment upon delivery and installation of the system at the customer’s premises. |
| 3. | Deferred Payment Model: For deferred payments, customers typically pay an advance amount before the dispatch of the system. The remaining balance is payable in yearly installments over a period of |
| 4. | Warranty Services: Instead of negotiating the sales price, the Company provides a warranty service that includes a |
| 5. | Delivery, Installation, and Training: The Company is responsible for delivering and installing the system at the customer’s premises. Post-installation, the Company provides free training to surgeons and surgical staff to enable them to operate the system effectively. With respect to the sale of surgical robotic systems, training is provided at the time of delivery to the end customer, however the effort involved is considered negligible. |
| 6. | Transfer of Risk and Rewards: The risks and rewards associated with the system are transferred to the customer upon delivery to their premises. |
Instrument and Accessories Sales:
We also sell instruments for use by surgeons in conjunction with the use of our surgical robotic systems. These instruments are consumable items for our hospital customers, and we recognize the revenues from the sale of instruments as and when the instruments are delivered to the customer.
10
| Warranty and Annual Maintenance Contract Sales: |
By application of ASC 606, a portion of the equipment sales value which is attributable towards the component of annual maintenance contracts is shown separately as Warranty sales. Once the assurance warranty or standard warranty periods are over, the maintenance contracts become effective and actual income from maintenance contracts is recognized as a distinct revenue stream.
| Lease Income: |
Under ASC 842, in cases where the systems are installed on a pay per procedure basis, the Company earns revenue which is a mix of fixed and variable components. Variable component consists of revenue share which is agreed based on the number and type of procedures performed by the customer, while the fixed component involves an agreed amount which the customer is obliged to pay over the lease term. Accordingly, the fixed component is recognized on a straight-line basis as lease income. Since the title to the system is not getting transferred to the counterparty, hence the cost relating to those systems is capitalized under property, plant and equipment and accordingly depreciation is charged over its period of useful life.
| n) | Property Plant & Equipment |
Property and equipment are stated at cost, which is generally comprised of the purchase price for such property or equipment, non-refundable duties and taxes, Installation cost, freight, other associated costs, but excludes any discounts and/or rebates, less accumulated depreciation and impairment.
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.
Property Plant and Equipment depreciated using the straight-line method at rates determined as per estimated useful life of the assets. The estimated useful lives used in calculating depreciation are as follows:
| Years | |||
| Computer & peripherals | |||
| Furniture | |||
| Leasehold improvement | |||
| Office equipment | |||
| Plant and machinery | |||
| Server & networking | |||
| Vehicles | |||
| Pay per use systems | |||
| Demo system |
| o) | 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.
11
| p) | Stock Compensation Expense |
Under the fair value recognition provisions of ASC Topic 718, Compensation-Stock Compensation, cost is measured at the grant date based on the fair value of the award and is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.
Determining the fair value of stock-based awards at the grant date requires significant judgment, including estimating the expected term over which the stock awards will be outstanding before they are exercised and the expected volatility of our stock.
Stock Options: These provide employees with the right, but not the obligation, to purchase shares of the Company’s stock at a specified price within a defined period, as per the terms of the stock option agreement. Stock-based compensation expense associated with AVRA 2016 Stock Incentive Plan is measured at fair-value using a Black-Scholes option-pricing model at commencement of each offering period and recognized over that offering period.
Stock Units (Restricted Stock Units, or RSUs): These do not require the employee to exercise any options. Each stock unit automatically converts into a specified number of shares upon vesting. The Company uses last three month’s average share price of common stock on OTC (prior to April 24, 2025) or on NASDAQ (subsequent to April 24, 2025) as grant date fair value for RSUs.
The Company recognizes stock-based compensation expense in the condensed consolidated statement of operations and comprehensive loss for both employees and non-employee directors based on the grant-date fair value of the awards. These costs are recognized on a straight-line basis over the requisite service period, or until the date at which the recipient becomes eligible for retirement, if shorter. Forfeitures of equity awards are accounted for as they occur.
The Company accounts for equity instruments issued in exchange for goods or services from non-employees in accordance with ASC Topic 718 Stock Compensation. The costs associated with these equity instruments 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.
| q) | Income Taxes |
We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. The carrying amounts of deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency, and severity of current and cumulative losses, the duration of statutory carry forward periods, and tax planning alternatives. We use a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals and litigation processes, if any. The second step is to measure the largest amount of tax benefit as the largest amount that is more likely than not to be realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
The Company determines the tax provision for interim periods using an estimate of its annual effective tax rate. Each quarter, the Company updates its estimate of annual effective tax rate for India Jurisdiction, and if its estimated tax rate changes, the Company makes a cumulative adjustment.
Management judgment is required in determining provision for income taxes, deferred tax assets and liabilities, tax contingencies, unrecognized tax benefits, and any required valuation allowance, including taking into consideration the probability of the tax contingencies being incurred. Management assesses this probability based upon information provided by its tax advisers, its legal advisers and similar tax cases. If at a later time the assessment of the probability of these tax contingencies changes, accrual for such tax uncertainties may increase or decrease.
12
The Company has a valuation allowance due to management’s overall assessment of risks and uncertainties related to its future ability in the U.S. to realize and, hence, utilize certain deferred tax assets, primarily consisting of net operating losses (“NOLs”), carry forward temporary differences and future tax deductions.
The effective tax rate for annual and interim reporting periods could be impacted if uncertain tax positions that are not recognized are settled at an amount which differs from the Company’s estimate. Finally, if the Company is impacted by a change in the valuation allowance resulting from a change in judgment regarding the realizability of deferred tax assets, such effect will be recognized in the interim period in which the change occurs.
| r) | Basic and Diluted Loss per Share |
The following table sets forth the computation of basic and diluted earnings per share:
| For the three months ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Net loss (a) | ( | ) | ( | ) | ||||
| Basic weighted average common shares outstanding (b) | ||||||||
| Dilutive effect of stock-based awards | ||||||||
| Diluted weighted average common shares outstanding | ||||||||
Earnings per share attributable to SS Innovations International, Inc. stockholders:
| Basic and Diluted (a)/(b) | ( | ) | ( | ) |
Basic net loss per share is calculated by dividing the net loss attributable to SSII stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period. For periods in which we report net losses, diluted net loss per share is the same as basic net loss per share because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
| s) | Research and Development Costs |
In accordance with ASC Topic 730 Research and development costs are expensed as incurred and include costs of material, salaries, benefits and other headcount-related costs, contract and other outside service fees, and facilities and overhead costs.
| t) | 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.
13
| u) | Recent Accounting Pronouncements |
In November 2024, FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to disaggregate any relevant expense caption presented on the face of the income statement within continuing operations into the following required natural expense categories, as applicable: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities or other depletion expenses. An entity’s share of earnings or losses from investments accounted for under the equity method is not a relevant expense caption that requires disaggregation. Such ASU’s amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of this pronouncement on our disclosures and our condensed consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (“ASC Topic 270”): Narrow-Scope Improvements. This ASU provides a comprehensive list of interim disclosures that are required by U.S. GAAP and incorporates disclosure principle of material events or changes occurred since the prior year-end. The ASU will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this ASU on its condensed consolidated financial statements.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments-Credit Losses (“ASC Topic 326”): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC Topic 606. The ASU will be effective for annual reporting periods beginning after December 15, 2025, including interim periods within those years, with early adoption permitted. The Company has adopted this ASU beginning January 1, 2026. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements and disclosures.
| v) | Leases |
The Company determines if an arrangement is a lease at inception of the contract. The Company’s assessment is based on whether: (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term of the contract, and (3) the Company has the right to direct the use of the asset. A lease is classified as a finance lease if any one of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset or (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset.
Operating leases are presented within “Right-of-use assets, operating lease” “Current portion of operating lease liabilities” and “Operating lease liabilities, less current portion” in the Company’s condensed consolidated balance sheet.
Right-of-use (ROU) assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease arrangement. Lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease ROU assets are recognized at commencement date in an amount equal to lease liability, adjusted for any lease prepayments, initial direct costs, and lease incentives. For leases in which the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date. The Company determines the incremental borrowing rate by adjusting the benchmark reference rates with appropriate financing spreads applicable to the respective geographies where the leases are entered and lease specific adjustments for the effects of collateral, if applicable. Lease terms include the effects of options to extend or terminate the lease when it is reasonably certain at commencement of the lease that the Company will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term reflecting single operating lease cost. The Company evaluates lease agreements to determine lease and non-lease components, which are accounted for separately.
14
Lease payments that depend on factors other than an index or rate are considered variable lease payments and are excluded from the operating lease assets and liabilities and are recognized as expense in the period in which the obligation is incurred. Lease payments include payments for common area maintenance, utilities such as electricity, heating and water, among others, and property taxes, and other similar payments paid to the landlord, which are treated as non-lease component.
The Company accounts for lease-related concessions in accordance with guidance in Topic 842, Leases, to determine, on a lease-by-lease basis, whether the concession provided by lessor should be accounted for as a lease modification.
The Company accounts for a modification as a separate contract when it grants an additional right of use not included in the original lease and the increase is commensurate with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract. Modifications which are not accounted for as a separate contract are reassessed as of the effective date of the modification based on its modified terms and conditions and the facts and circumstances as of that date. Upon modification, the Company remeasures the lease liability to reflect changes to the remaining lease payments and discount rates and recognizes the amount of the remeasurement of the lease liability as an adjustment to the ROU assets. However, if the carrying amount of the ROU assets is reduced to zero as a result of modification, any remaining amount of the remeasurement is recognized as an expense in condensed consolidated statement of operations and comprehensive loss.
The Company reviews ROU assets for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable.
Sales-type Leases
Lease Classification
In determining whether a transaction should be classified as a sales-type or operating lease (whether fixed-payment or usage-based), the Company considers the following terms at lease commencement: (1) whether title of the system transfers automatically or for a nominal fee by the end of the lease term; (2) whether the present value of the minimum lease payments equals or exceeds substantially all of the fair value of the leased system; (3) whether the lease term is for the major part of the remaining economic life of the leased system; (4) whether the lease grants the lessee an option to purchase the leased system that the lessee is reasonably certain to exercise; and (5) whether the underlying system is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term. However, if classifying a lease as a sales-type lease would result in a selling loss at commencement (day-one selling loss), the Company classifies such lease as an operating lease.
Derecognition and Selling Profit
At the commencement date of a qualifying sales-type lease, the Company derecognizes the underlying asset and recognizes a net investment in the lease, which includes (i) the present value of future lease payments, (ii) any guaranteed or unguaranteed residual value, and (iii) unearned interest income. The resulting selling profit or loss is measured as the difference between the net investment in the lease and the carrying amount of the derecognized asset.
Variable lease payments
Variable lease payments under the arrangement do not depend on an index or a rate but are instead based on the customer’s actual usage of the leased equipment or related surgical activity. Because such payments are usage-based, they are excluded from the initial measurement of the lease. SSII recognizes these variable amounts as revenue in the period in which the underlying surgical procedures occur, consistent with the terms of the pay-per-use arrangement.
15
Interest Income Recognition
Interest income on sales-type leases is recognized using the rate implicit in the lease so as to produce a constant periodic rate of return on the net investment.
Credit Losses
The Company applies the current expected credit loss (“CECL”) model to its net investment in sales-type leases. Expected credit losses are estimated based on historical loss experience, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is reassessed each reporting period and included as a contra-asset to the net investment in sales-type leases.
Comprehensive Loss
Comprehensive loss consists of net loss and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net loss. Our other comprehensive loss represents foreign currency translation adjustment attributable to Indian operations. Refer to Consolidated Statements of Comprehensive Loss. Total foreign currency transaction gains and losses were immaterial for the three months ended March 31, 2026, and 2025.
NOTE 3 – SEGMENT INFORMATION
The Company is focused on designing, manufacturing and marketing an advanced, next-generation and affordable surgical robotic system called the SSi Mantra, and the instruments and accessories used with SSi Mantra to perform a wide range of soft-tissue, robotically assisted surgeries. The Company is committed to accelerating access to surgical robotics technologies in all parts of the world and particularly in underserved regions through a comprehensive ecosystem of providing an affordable surgical robotic system, its related instruments and accessories backed up by clinical, field service and maintenance support also provided by the Company. The systems as well as instruments and accessories are primarily designed, developed and manufactured by the Company in its manufacturing facility located in India.
During the three months ended March 31, 2026,
and 2025, the Company’s revenue from within India accounted for
The Company’s Chief Executive Officer is
the Chief Operating Decision Maker (“CODM”). The CODM utilizes the Company’s long-range plan, which includes product
development, technology refinement plans and long-range selling and financial models, as a key input to resource allocation.
16
Significant segment expenses within income from operations, as well as within net income / loss, include cost of revenue, research and development, and selling, general and administrative expenses, which are each separately presented on the Company’s Consolidated Statements of Operations. Other segment items within net income include interest and other income, net, and income tax expense.
The Company’s long-lived assets consist
primarily of property, plant and equipment. As of March 31, 2026 and December 31, 2025,
NOTE 4 – PROPERTY, PLANT AND EQUIPMENT, NET
The Company’s property, plant and equipment consisted of the following as of:
| March 31, 2026 | December 31, 2025 | |||||||
| Gross Amount | ||||||||
| Computer & peripheral | ||||||||
| Furniture | ||||||||
| Leasehold improvement | ||||||||
| Office equipment | ||||||||
| Pay Per Use Systems | ||||||||
| Plant and machinery | ||||||||
| Server & networking | ||||||||
| Vehicles | ||||||||
| Demo system | ||||||||
| Capital work in progress | - | - | ||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total | ||||||||
Depreciation expenses for the three months ended
March 31, 2026, and 2025 amounted to $
The Company deployed eight systems for demonstration purposes. As of March 31, 2026, four systems were located at the Company’s premises, and four systems were installed at a partner’s facility. These systems remain under the Company’s ownership and control and are therefore capitalized as property, plant, and equipment in accordance with ASC 360.
NOTE 5 – NET INVESTMENT IN SALE-TYPE LEASE
Measurement of net investment
The components of the Company’s investments in sales-type leases, net for the three months ended March 31, 2026, were as follows:
| March 31, 2026 | December 31, 2025 | |||||||
| Gross lease receivables | ||||||||
| Unearned income | ( | ) | ( | ) | ||||
| Subtotal | ||||||||
| Allowance for credit loss | - | - | ||||||
| Net investment in sales-type leases | ||||||||
17
The net investment in sales-type leases was classified in the consolidated balance sheets as follows:
| March 31, 2026 | December 31, 2025 | |||||||
| Other Current Assets | ||||||||
| Long-term investment in sales-type leases, net | ||||||||
| Net investment in sales-type leases | ||||||||
Interest income recognition
Interest income under sales-type leases during three months ended March 31, 2026 were as follows:
| March 31, 2026 | December 31, 2025 | |||||||
| Interest income | ||||||||
Maturity analysis of lease receivables
The following table presents the undiscounted cash flows related to gross lease receivables as of March 31, 2026.
| As of March 31, 2026 | As of December 31, 2025 | |||||||
| March 31, 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 and thereafter | ||||||||
| Total | ||||||||
NOTE 6 – ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following as of:
| March 31, 2026 | December 31, 2025 | |||||||
| Accounts receivable, net | ||||||||
| Accounts receivable, net (non-current) | ||||||||
The Company performed an analysis of the trade
receivables related to SSI India and determined, based on the deferred payment terms of the contracts, that a $
18
Activity in the allowance for the credit losses for the period ended March 31, 2026 and 2025 was as follows:
| As of | ||||||||
| March 31, 2026 | December 31, 2025 | |||||||
| Balance at the beginning of the year | ||||||||
| Additions | ||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||
| Balance at the end of the year | ||||||||
Details of customers which accounted for 10% or more of total revenues during the three months ended March 31, 2026, and March 31, 2025 and 10% or more of total accounts receivables as at March 31, 2026, and December 31, 2025.
| Percentage of revenue | Percentage of accounts | |||||||||||||||
| For three months ended | receivables as of | |||||||||||||||
| March 31, 2026 | March 31, 2025 | March 31, 2026 | December 31, 2025 | |||||||||||||
| Customer A | ^ | % | - | - | ||||||||||||
| Customer B | ^ | % | ^ | ^ | ||||||||||||
| Customer C | ^ | % | % | % | ||||||||||||
| Customer D | ^ | % | - | - | ||||||||||||
| Customer E | ^ | % | ^ | ^ | ||||||||||||
| ^ |
NOTE 7 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH
For the purpose of condensed consolidated statement of cash flows, cash, cash equivalents and restricted cash (Current) & (Non-Current) consisted of the following as of:
| March 31, 2026 | December 31, 2025 | |||||||||
| Cash and cash equivalents | ||||||||||
| Fixed Deposit | Lien Against Overdraft Facility | |||||||||
| Lien Against Bank Guarantee | ||||||||||
| Lien Against Credit Card Facility | ||||||||||
| Restricted cash (Current) | ||||||||||
| Fixed Deposit | Lien Against Bank Guarantee | |||||||||
| Restricted cash (Non-current) | ||||||||||
| Total Cash, cash equivalents and restricted cash | ||||||||||
We have classified fixed deposits (FDs), which are subject to withdrawal restrictions, as Restricted cash. Additionally, time deposits with remaining maturity of over one year have been classified as non-current.
The Company has secured a bank overdraft facility from HDFC Bank, collateralized by fixed deposits held with HDFC Bank. This facility includes a withdrawal restriction tied to the fixed deposit. (Refer Note 11 – Bank Overdraft.)
19
NOTE 8 – PREPAID, CURRENT AND NON-CURRENT ASSETS
Prepaid, Current and Non-Current Assets consisted of the following as of:
| March 31, 2026 | December 31, 2025 | |||||||
| Balances from statutory authorities | ||||||||
| Prepaid expense- stock compensation current | ||||||||
| Net investment in sale type lease – current* | ||||||||
| Security deposits | ||||||||
| Other prepaid- current assets | ||||||||
| Prepaid and other current assets | ||||||||
| Prepaid expense- stock compensation non current | ||||||||
Net investment in sale type lease – non current* | ||||||||
| Security deposits | ||||||||
| Other prepaid- non current assets | ||||||||
| Prepaid and other non current assets | ||||||||
| Total prepaid, current and non current assets | ||||||||
| * |
Refer Note-20 for Related Party Balances
Prepaid expenses – stock compensation represents unamortized portion of common stock granted to advisors for services to be rendered by them in future. (Refer Note 19 – Stock Compensation Expenses).
NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accounts payable and accrued expenses consisted of the following as of:
| March 31, 2026 |
December 31, 2025 |
|||||||
| Accounts payable | ||||||||
| Payable to statutory authorities | ||||||||
| Client liabilities | ||||||||
| Salary payable | ||||||||
| Other accrued liabilities | ||||||||
| Other accrued liabilities | ||||||||
| Provision for Gratuity Long term | ||||||||
| Other accrued liabilities | ||||||||
| Other accrued liabilities- Non Current | ||||||||
| Total accounts payable, accrued current and non current expenses | ||||||||
Accounts payable at $
Refer Note-20 for Related Party Balances.
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NOTE 10 – NOTES PAYABLE
In January 2025, the Company raised $
In February 2025, the Company paid $
In February 2025, the Company paid $
In February 2025, the Company converted three
In February 2025, the Company converted Convertible
Notes totaling $
In March 2025, the Company converted Convertible
Notes totaling $
Refer Note-20 for Related Party Balances.
NOTE 11 – BANK OVERDRAFT FACILITY
Bank overdraft facility consisted of the following as of:
| March 31, 2026 | December 31, 2025 | |||||||
| HDFC Bank Ltd overdraft (with lien against fixed deposits) (OD1) | ||||||||
| HDFC Bank Ltd overdraft (OD2) | ||||||||
| HDFC Bank Ltd overdraft (OD3) | ||||||||
| ICICI Bank overdraft (OD4) | - | |||||||
| Bank overdraft | ||||||||
The HDFC Bank overdraft facility (OD1), amounting
to $
In October 2025, the Company converted its overdraft
facility into a short-term working capital demand loan (“WCDL”) repayable on demand for a period of six months. The WCDL
is secured against the lien on fixed deposits of $
21
The cash credit facility is sanctioned at an
interest rate of
During the period ended March 31, 2026, the Company
availed overdraft facilities from ICICI Bank, which are secured against a lien on fixed deposits aggregating to $
NOTE 12 – DEFERRED REVENUE
Contract liabilities (deferred revenue) consist of advance billings and billing in excess of revenues recognized. Deferred revenue also includes the amount for which services have been rendered but other conditions of revenue recognition are not met, for example, where the Company does not have an enforceable contract.
The revenues attributable to the warranty is
recognized over the period to which it relates. During the three months ended March 31, 2026, Company had sold
In case of systems sold on a deferred payment
basis, the present value of the invoiced system sales, realizable over the deferred payment period, is recognized as system sales. The
difference between the invoiced amount and its present value is adjusted (reduced) in the accounts receivable balance. This difference
is recorded as interest income under other income, with a corresponding impact on accounts receivable over the collection period of contract.
The Company recorded $
| March 31, 2026 | December 31, 2025 | |||||||
| Deferred revenue- beginning of period | ||||||||
| Additions | ||||||||
| Net changes in liability for pre-existing contracts | ||||||||
| Revenue recognized for system sales | - | |||||||
| Revenue recognized for instrument sales | ||||||||
| Revenue recognized for warranty sales | ||||||||
| Deferred revenue- end of period | ||||||||
| Deferred revenue expected to be recognized in: | ||||||||
| One year or less | ||||||||
| More than one year | ||||||||
22
For the three months ended March 31, 2026 and 2025:
The following table disaggregates our revenue by major source as of:
| March 31, 2026 | March 31, 2025 | |||||||
| System sales | ||||||||
| Instruments sale | ||||||||
| Warranty sale | ||||||||
| Lease income | ||||||||
| Total revenue | ||||||||
Revenues for three months ended March 31, 2026 and 2025 by geographic region (determined based upon customer domicile), were as follows:
| March 31, 2026 | March 31, 2025 | |||||||
| India | ||||||||
| South America | ||||||||
| Philippines | - | |||||||
| Indonesia | ||||||||
| UAE | ||||||||
| Nepal | - | |||||||
NOTE 13 – STOCKHOLDERS’ EQUITY
Common Stock
The Company is authorized to issue up to
As of March 31, 2026, there were
Preferred Stock
The Company is authorized to issue up to
23
As of March 31, 2026, there were
Common Stock issued at the time of Merger
At Closing of the Merger on April 14, 2023,
Common Stock issued post-Merger
On February 12, 2025, the Company issued
On February 13, 2025, the Company issued
On February 20, 2025, the Company issued
On March 1, 2025, the Company issued
On March 31, 2025, the Company issued
On April 2, 2025, the Company issued
On April 30, 2025, the Company issued
On May 22, 2025, the Company issued
On May 28, 2025, the Company issued
24
On August 28, 2025, the Company issued
On October 1, 2025, the Company issued
On October 22, 2025, the Company issued
On November 27, 2025, the Company issued
On December 12, 2025, the Company issued
On January 9, 2026, the Company issued
During the month of March 2026, the Company issued
| ● |
| ○ |
| ○ |
| ○ |
| ● |
25
NOTE 14 – INVENTORY
Inventory consisted of the following as of:
| March 31, 2026 | December 31, 2025 | |||||||
| Raw materials (includes goods in transit $ | ||||||||
| Work-in-progress | ||||||||
| Finished goods | ||||||||
| Less: Inventory valuation allowance | ( | ) | ( | ) | ||||
Changes in the inventory valuation allowance were as follows:
| March 31, 2026 | December 31, 2025 | |||||||
| Balance at the beginning of the year | - | |||||||
| (Reversal) /Additions charged to expense | ( | ) | ||||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Balance at the end of the year | ||||||||
The provision for slow-moving and obsolete inventory was recognized within cost of sales in the Condensed Consolidated Statements of Operations.
NOTE 15 – LEASES
The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates.
The following is a summary of operating lease assets and liabilities as of:
| Operating leases | March 31, 2026 | December 31, 2025 | ||||||
| Assets | ||||||||
| Right of use operating lease assets | ||||||||
| Liabilities | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Non current portion of operating lease liabilities | ||||||||
| Total lease liabilities | ||||||||
26
| Operating leases | March 31, 2026 | December 31, 2025 | ||||||
| Weighted average remaining lease terms (years) | ||||||||
| Ilabs Info Technology 3rd Floor | ||||||||
| Ilabs Info Technology 1st Floor | ||||||||
| Ilabs Info Technology Ground Floor | ||||||||
| Ilabs Info Technology Basement-3 | ||||||||
| Village Chhatarpur-1849-1852-Farm | ||||||||
| Weighted average discount rate | ||||||||
| Ilabs Info Technology 3rd Floor | % | % | ||||||
| Ilabs Info Technology 1st Floor | % | % | ||||||
| Ilabs Info Technology Ground Floor | % | % | ||||||
| Ilabs Info Technology Basement-3 | % | % | ||||||
| Village Chhatarpur-1849-1852-Farm | % | % | ||||||
Supplemental cash flow and other information related to leases are as follows:
| Period ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Cash payments for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash outflows for operating leases | ||||||||
Maturities of lease liabilities as of March 31, 2026 were as follows:
| Fiscal year | Operating Leases Amount | |||
| March 31, 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 and thereafter | ||||
| Total lease payment | ||||
| Less: Imputed Interest | ||||
| Present value of lease liabilities | ||||
27
NOTE 16 – INCOME TAX
The effective tax rate for the three months ended March 31, 2026 was (4.41%) compared to nil for the three months ended March 31, 2025.
The Company recorded income tax expense of $
Deferred income taxes recognized in OCI are as follows:
| Period ended | ||||||||
| Particulars | March 31, 2026 | March 31, 2025 | ||||||
| Deferred taxes benefit / (expense) recognized on: | ||||||||
| Domestic | ||||||||
| Federal | - | - | ||||||
| State | - | - | ||||||
| Foreign | ||||||||
| India | ||||||||
| Retirement benefits | ( | ) | - | |||||
| Total | ( | ) | - | |||||
As of March 31, 2026, and December 31, 2025, the Company recorded a valuation allowance of $
The Company’s policy is to recognize
interest and penalties related to uncertain income tax matters within income tax expense in the condensed consolidated statements of operations.
As of March 31, 2026, the Company had accrued $
As of March 31, 2026, the Company has no unrecognized tax benefits.
28
NOTE 17 – EMPLOYEE BENEFIT PLAN
The Company’s Gratuity Plan in India provides for a lump sum payment to employees on retirement or upon termination of employment in an amount based on the respective employee’s salary and years of employment with the Company. Liabilities under this plan are determined by actuarial valuation using the projected unit credit method. Current service costs for these plans are accrued in the year to which they relate. Actuarial gains or losses or prior service costs, if any, resulting from amendments to the plans, are recognized and amortized over the remaining period of service of the employees.
The Gratuity Plan is unfunded, and the Company does not make contributions to the plan assets.
The benefit obligation has been measured as of March 31, 2026, and December 31, 2025. The following table sets forth the activity and the amounts recognized in the Company’s condensed consolidated financial statements at the end of the relevant periods:
| March 31, 2026 | December 31, 2025 | |||||||
| Change in projected benefit obligation | ||||||||
| Projected benefit obligation as on beginning | ||||||||
| Service cost | ||||||||
| Amortisation of prior service cost | ||||||||
| Interest cost | ||||||||
| Benefits paid | - | - | ||||||
| Actuarial (gain) / loss ^ | ( | ) | ||||||
| Prior service cost | - | |||||||
| Effect of exchange rate changes | ( | ) | ( | ) | ||||
| Projected benefit obligation at end | ||||||||
| Unfunded status in the end | ||||||||
| Unfunded amount recognized in consolidated balance sheets | ||||||||
| Non-current liability (included under other non-current liabilities) | ||||||||
| Current liability (included under accrued employee costs) | ||||||||
| Total accrued liability | ||||||||
| Accumulated benefit obligation at end | ||||||||
29
| ^ |
Components of net periodic benefit costs recognized in condensed consolidated statements of operations and comprehensive loss and actuarial loss reclassified from accumulated other comprehensive income (“AOCI”), were as follows:
| March 31, 2026 | March 31, 2025 | |||||||
| Service cost | ||||||||
| Amortization of prior service cost | - | |||||||
| Interest cost | ||||||||
| Expected return on plan assets | - | - | ||||||
| Amortization of actuarial loss, gross of tax | - | - | ||||||
| Net gratuity cost | ||||||||
The components of retirement benefits included in AOCI, excluding tax effects, were as follows:
| March 31, 2026 | March 31, 2025 | |||||||
| Net actuarial (gain) / loss | ( | ) | ||||||
| Amount recognized in AOCI, excluding tax effects | ( | ) | ||||||
The weighted average actuarial assumptions used to determine benefit obligations and net gratuity cost were:
| March 31, 2026 | December 31, 2025 | |||||||
| Discount rate | % | % | ||||||
| Rate of increase in compensation levels | % | % | ||||||
| Expected long-term rate of return on plan assets per annum | - | - | ||||||
The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards. The discount rates are either based on current market yields on government securities or yields on government securities adjusted for a suitable risk premium, if available.
Expected benefit payments as of March 31, 2026
| March 31, 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031-2035 |
30
NOTE 18 – FAIR VALUE MEASUREMENT – FINANCIAL INSTRUMENTS
Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:
| ● | Level 1: observable inputs such as quoted prices in active markets. |
| ● | Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and |
| ● | Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions. |
The Company’s financial assets which are set out below in the table are measured at fair value by considering the level III inputs. The company does not have financial assets which are measured using Level I or Level II inputs.
Carrying value and fair value of Level III Financial assets and liabilities:
| Carrying Value | Fair Value | |||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2026 | December 31, 2025 | |||||||||||||
| Financial Assets | ||||||||||||||||
| Account receivables, net (1) | ||||||||||||||||
| Lease receivables (2) | ||||||||||||||||
| Other non-current financial assets (2) | ||||||||||||||||
| Total | ||||||||||||||||
| Financial Liabilities | ||||||||||||||||
| Lease liabilities (3) | ||||||||||||||||
| Total | ||||||||||||||||
| (1) |
| (2) |
| (3) |
| (4) | The Company has long term lease liabilities in relation to office properties which is carried at cost using the discount rate (Refer Note 15 Lease). |
31
NOTE 19 – STOCK COMPENSATION EXPENSES
Stock options to Employees: The Company
grants shares of the Company’s common stock, par value $
Restricted Stock Award to Employees: The
Company grants restricted shares of the Company’s common stock, $
Stock Options issued to Doctors/Proctors/Advisors (“Advisor’s”): The Company issues shares of the Company’s common stock (“Advisory Shares”) to retain and compensate certain Advisors for performing services for the Company and in exchange for the compensation, which is issued in a phased manner as determined by the company. The “Services” include but are not limited to (a) providing proctoring and medical advisory services, (b) advising the Company on the development of surgical robotics procedures and improvements in design and technology (c) participation in case of observation and performance of live surgeries, and (d) disseminating information about the Company’s products in various scientific meetings and surgical robotic conferences globally (e) investor’s digital marketing support. The Company issues such Advisory Shares in a phased manner commensurate with the period over which the services are to be performed, as determined by the Company.
Stock options:
Stock options activity for the period ended March 31, 2026, was as follows:
| Number of shares options | Weighted average grant date fair value per share | |||||||
| Unvested balance as of December 31, 2025 | $ | |||||||
| Granted | - | - | ||||||
| Vested | - | - | ||||||
| Forfeited | - | - | ||||||
| Unvested balance as of March 31, 2026 | $ | |||||||
| Number of shares options | Weighted average grant date fair value per share | |||||||
| Exercisable balance as of March 31, 2026 | $ | |||||||
During the three months ended March 31, 2026, no stock options are vested. Further there were no stock options issued during the end of March 31, 2026.
32
Restricted Stock Awards (RSA)
Restricted Stock Awards activity for the period ended March 31, 2026, was as follows:
| Number of shares RSAs | Weighted average grant date fair value per share | |||||||
| Unvested balance as of December 31, 2025 | $ | |||||||
| Granted | $ | |||||||
| Vested | $ | |||||||
| Forfeited | $ | |||||||
| Unvested balance as of March 31, 2026 | $ | |||||||
| Number of shares RSAs | Weighted average grant date fair value per share | |||||||
| Exercisable balance as of March 31, 2026 | - | - |
During the three months ended March 31, 2026,
Advisory shares:
Common stock issued to consultants as advisory shares during the year as follows:
| Grant dates | Fair value on grant date | Unvested shares in the beginning | Shares granted during the year | Shares vested during the period | Unvested shares at the end of the period | |||||||||||||||
| 31-Oct-23 | - | |||||||||||||||||||
| 31-Oct-23 | - | |||||||||||||||||||
| 31-Oct-23 | - | |||||||||||||||||||
| 31-Oct-23 | - | |||||||||||||||||||
- | ||||||||||||||||||||
The aggregate vesting date fair value of Advisory
shares was $
There were no advisory shares issued during the three months period ended March 31, 2026.
33
Stock compensation expenses
During the three months period ended March 31,
2026 and March 31, 2025, the Company has recorded share compensation expense of $
| March 31, 2026 | March 31, 2025 | |||||||
| Stock options | ||||||||
| Restricted stock units (RSU) | ||||||||
| Advisory shares | ||||||||
| Total stock compensation expenses | ||||||||
Stock option model and assumptions
The Black-Scholes-Merton option pricing model
is used to estimate the fair value of stock options and RSU granted under the Company’s share based compensation plans and the
rights to acquire stock granted under the stock options plans.
| Period ended March 31, 2026 | ||||||||||||||||
| Grant date | Restricted stock awards January 09, 2026 | Stock Options February 13, 2024 | Stock Options November 27, 2023 | Restricted stock awards November 27, 2023 | ||||||||||||
| Fair value on grant date | $ | $ | $ | $ | ||||||||||||
| Risk free interest rate | % | % | % | % | ||||||||||||
| Expected volatility | % | % | % | % | ||||||||||||
| Exercise prices | $ | $ | $ | $ | ||||||||||||
| Share price on the grant date | $ | $ | $ | $ | ||||||||||||
| Expected term of vesting | ||||||||||||||||
As share-based compensation expense recognized in the Condensed Consolidated Statements of operations and comprehensive loss during the period ended March 31, 2026, and 2025, is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, if any.
As of March 31, 2026, there was $
34
NOTE 20 – RELATED PARTY
The details of transactions with the related parties for the three months ended March 31, 2026 and March 31, 2025 and balances outstanding as on March 31, 2026 and December 31, 2025 are as follows:
| Particulars | For the period ended March 31, 2026 | For the period ended March 31, 2025 | ||||||
| Transactions during the year: | ||||||||
| Expenses incurred on behalf of affiliates | ||||||||
| Srivastava Robotic Surgery Pvt Ltd | ||||||||
| SS International Centre for Robotics Surgery Pvt Ltd | ||||||||
| Sudhir Srivastava Medical Innovations Pvt Ltd | ||||||||
| Telegnosis Pvt Ltd | ||||||||
| Sudhir Prem Srivastava, M.D. | - | |||||||
| Expense incurred on behalf of Company | ||||||||
| Sudhir Prem Srivastava, M.D. | ||||||||
| Milan Rao | - | |||||||
| 2016 Stock Incentive Plans Expenses | ||||||||
| Anup Sethi | - | |||||||
| Barry F. Cohen | ||||||||
| Dr. S.P. Somashekhar | ||||||||
| Sudhir Prem Srivastava, M.D. | ||||||||
| Vishwajyoti P. Srivastava M.D | ||||||||
| Milan Rao# | - | |||||||
| Consultancy charges, sitting fees and other perquisites | ||||||||
| Anup Sethi | - | |||||||
| Barry F. Cohen | ||||||||
| Sudhir Prem Srivastava, M.D. | ||||||||
| Vishwaivoti P. Srivastava, M.D | ||||||||
| Milan Rao# | - | |||||||
| Dr. Frederic H Moll | - | |||||||
| Dr. S.P. Somashekhar | - | |||||||
| Mr. Tim Adams | - | |||||||
| Mylswamy Annadurai | - | |||||||
| Proceeds from Private Investment in Public Equity | ||||||||
| Sushruta Private Limited | - | |||||||
| Mr. Tim Adams | - | |||||||
| Dr. Frederic H Moll | - | |||||||
| Proceeds from notes issued | ||||||||
| Sushruta Private Limited | - | |||||||
| Interest accrued on notes | ||||||||
| Sushruta Private Limited | - | |||||||
| Conversion of notes into common stock | ||||||||
| Sushruta Private Limited | - | |||||||
35
| Balance outstanding as on period end: | ||||||||
| Accrued expenses & other current liabilities: | As on March 31, 2026 | As on December 31, 2025 | ||||||
| Balance receivable / (payable) | ||||||||
| Barry F. Cohen | ( | ) | ( | ) | ||||
| Milan Rao | ( | ) | - | |||||
| Prepaids and other current assets: | ||||||||
| Srivastava Robotic Surgery Pvt Ltd | ||||||||
| SS International Centre for Robotics Surgery Pvt Ltd | ||||||||
| Cardio Bahamas^ | ( | ) | ( | ) | ||||
| SSI PTE Singapore^ | ( | ) | ( | ) | ||||
| Sudhir Prem Srivastava, M.D.^ | ||||||||
| Sudhir Srivastava Medical Innovations Pvt Ltd | ||||||||
| Telegnosis Private Limited | ||||||||
| Sushruta Private Limited | ||||||||
| Vishwajyoti P. Srivastava M.D | - | |||||||
| ^ |
| # |
NOTE 21 – COMMITMENTS AND CONTINGENCIES
Other Commitments
The Company, through its SSI-India subsidiary,
occupies office, manufacturing, and assembly space in Gurugram, Haryana (India) under a lease agreement entered into in March 2021, with
monthly payments of $
Contingencies
The Company’s Indian Subsidiary namely
“Sudhir Srivastava Innovations Private Limited” has received the draft assessment order dated November 29, 2023 under section
144C(1) related to proposed transfer pricing adjustment of $
Further, the Company had filed its objections
before the Dispute Resolution Panel (DRP). The DRP, vide its directions dated August 28, 2024, granted partial relief of $
Subsequently, the Company has filed an appeal before the Income Tax Appellate Tribunal (ITAT) on the remaining disputed issues. As informed by the Management, the matter is pending adjudication before the ITAT. The Company believes that its position will more likely than not be sustained upon final examination by the tax authorities and accordingly has not accrued any liabilities with respect to these matters in its condensed consolidated financial statements.
NOTE 22 – SUBSEQUENT EVENTS
| Ø | On April 17, 2026, the Company’s board of directors adopted the 2026 Stock Incentive Plan, pursuant to which |
| Ø | On May 1, 2026, the Company filed a registration statement on Form S-3, to register the Shares for resale. The shares of our common stock were purchased by officers and directors who participated in the private placement and are not registered hereby for resale under the Securities Act. In addition, The Company may sell securities from time to time and in one or more offerings up to a total amount of $ |
36
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Introduction
The Company is engaged in the business of developing, manufacturing, and selling a surgical robotic system under our proprietary brand “SSi Mantra,” together with allied accessories and a wide range of surgical instruments capable of supporting cardiac and a variety of other surgical procedures under our proprietary brand “SSi Mudra”. Having commenced commercial sales of our surgical robotic system in the second half of 2022, the year 2023 was our first full year of commercial sales and during the year 2024, we introduced our upgraded SSi Mantra 3 system, further consolidated our installed base of SSi Mantra in various parts of India and began to expand our presence in other global markets. Those efforts continued during 2025 with filing for U.S. FDA approval and EU CE mark approval during the year ended December 31, 2025, and are ongoing in 2026. We are also undertaking development efforts to expand our product line in connection with our goal to make robotic surgery more affordable and accessible.
Our financial performance is largely driven by increasing awareness of the benefits of robotically assisted surgery, reduced learning curves for robotic surgeons and the affordability and accessibility of surgical robotic technology. Our financial performance is also dependent on our obtaining regulatory approvals in various regulated markets where we plan to sell our products. Robotically assisted surgeries are increasingly being recognized as an approved treatment modality from an insurance coverage perspective.
Our manufacturing operations being based in India derive significant operating cost advantages in terms of availability of quality and cost-effective fabrication/3D printing solutions, electronic/electrical/mechanical components, outsourced services and skilled manpower. All these factors help us in having lower costs of production which eventually helps us make our surgical robotic system cost effective and relatively affordable.
During the three months ended March 31, 2026, we sold 18 SSi Mantra surgical robotic systems and installed 3 systems on a pay-per-use basis and upgraded 2 systems.
Results of Operations
Introduction
The financial statements appearing elsewhere in this report have been prepared assuming that the Company will continue as a going concern. The Company is still in its initial years of revenue generation by way of the sale of its product and has not yet established consistent operational revenue cash flows to meet all its fixed operating costs and hence may continue to incur losses for some time. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
37
The following table provides selected balance sheet data for the Company as of:
Balance Sheet Data
| March 31, 2026 | December 31, 2025 | |||||||
| Cash | 15,979,714 | 3,206,406 | ||||||
| Restricted cash** | 8,025,966 | 6,396,614 | ||||||
| Total Assets | 90,546,889 | 74,226,217 | ||||||
| Total Liabilities | 36,023,476 | 36,007,966 | ||||||
| Total stockholders’ equity | 54,523,413 | 38,218,251 | ||||||
| ** | Represents Fixed Deposits held by bank as security for bank facilities and certain performance guarantees. |
To date, the Company has mainly relied on debt and equity raised in private offerings to finance its operations. During the balance of the year ending December 31, 2026, the Company plans to raise additional capital through further private or public offerings of its securities. However, if we are unable to do so and if we experience a shortfall in operating capital, we could be faced with having to limit our expansion plans, research and development efforts and marketing activities.
Three months ended March 31, 2026, as compared to the three months ended March 31, 2025
| For the period ended | ||||||||
| Particulars | March 31, 2026 | March 31, 2025 | ||||||
| Total Revenue | 11,101,366 | 5,120,610 | ||||||
| Cost of revenue | (5,774,145 | ) | (4,033,402 | ) | ||||
| Gross profit | 5,327,221 | 1,087,208 | ||||||
| Research & development expense | 995,440 | 1,010,095 | ||||||
| Stock compensation expense | 3,144,315 | 2,379,212 | ||||||
| Depreciation and amortization expense | 323,747 | 208,882 | ||||||
| Selling, general and administrative expense | 4,502,476 | 3,410,872 | ||||||
| Loss from operations | (3,638,757 | ) | (5,921,853 | ) | ||||
| Other income, net | 207,538 | 240,500 | ||||||
| Income tax expense | 151,322 | - | ||||||
| Net loss | (3,582,571 | ) | (5,681,353 | ) | ||||
Total Revenue. For the three months ended March 31, 2026,we had revenues of $11,101,366 (comprised of $9,575,370 of system sales, $1,151,228 of instrument sales, $357,686 of warranty sales and lease income $17,082), compared to revenues of $5,120,610 (comprising $4,502,482 of system sales, $477,208 of instrument sales, $122,504 of warranty sales and lease income $18,416), during the three months ended March 31, 2025. The increase in revenue is primarily due to an increase in the number of SSi Mantra 3 surgical robotic systems and instruments sold during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.
38
Research and Development Expenses. Research and development expenses for the three months ended March 31, 2026, were $995,440, as compared to $1,010,095 for the three months ended March 31, 2025. The decrease primarily attributable to cost optimization initiatives and the timing of project-related expenditures, partially offset by continued investments in product development and technology enhancements.
Stock compensation expense. We had stock compensation expenses of $3,144,315 and $2,379,212 during the three months ended March 31, 2026 and 2025, respectively. The increase in stock compensation expense was primarily attributable to the issuance of new Restricted Share Awards, as well the vesting of advisory shares during the current period, under the Company’s 2016 Stock Incentive Plan.
Depreciation and amortization expense. We had depreciation and amortization expense of $323,747 for three months ended March 31, 2026, as compared to $208,882 for three months ended March 31, 2025. The increase in depreciation and amortization expense was primarily attributable to an increase in fixed assets during the current period.
Selling, general and administrative expense. We incurred $4,502,476 in selling, general and administrative (“SG&A”) expense during the three months ended March 31, 2026, as compared to $3,410,872 for the three months ended March 31, 2025.
Our SG&A expense is comprised of expenses relating to salaries and benefits, retirement benefits as well as costs related to recruitment, other compensation expenses of sales and marketing and client management personnel, sales commission, travel and brand building, client events and conferences, training and retention of senior management and other support personnel in enabling functions, telecommunications, utilities, travel and other miscellaneous administrative costs. SG&A expenses also include legal and professional fees (which represent the costs of third party legal, tax, accounting, immigration and other advisors), investment in product development, digital technology, advanced automation and robotics, related to grants of our equity awards to members of our board of directors. The increase in SG&A expense compared to the previous period is primarily due to higher legal and underwriting fees and expenses incurred for business events held during the current period, which were not present in the previous period.
Other income/expenses, net. We have recognized $207,538 in interest income (net) for the three months ended March 31, 2026, as compared to $240,500 during the three months ended March 31, 2025. The decrease in net income was primarily attributable to the decrease in interest expense on convertible notes during the three months ended March 31, 2026, which was incurred in the prior year period offset by reversal of provision for doubtful debts during the three months period ended March 31, 2025.
Income tax expense. For the three months ended March 31, 2026, our income tax expense increased by $151,352 as compared to nil during the three months period ended March 31, 2025, primarily due to the recognition of income tax expense in our Indian operations for the first time. Historically, our Indian subsidiary had incurred tax losses and was not subject to current income tax. However, during the current period, the Indian operations generated sufficient taxable profits, resulting in the recognition of current tax expense.
Net Loss. We incurred net loss of $3,582,571 for the three months ended March 31, 2026, as compared to a net loss of $5,681,353 for the three months ended March 31, 2025. The decrease in net loss from March 31, 2026 to March 31, 2025 is primarily the result of increase in gross profit by $4,240,013 and reduction in Research & development expense by $14,655 offset by increases in SG&A expense by $1,091,604, Stock compensation expense by $765,103, Depreciation and amortization expense of $114,865 and income tax expense of $151,352.
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Liquidity and Capital Resources
The Company expects to require substantial funds for scaling up its operations, for incurring capital expenditure to have its own in-house machining and tooling capacity and to continue to finance its research and development work in the field of surgical robotics.
| For the three months ended | ||||||||
| Particulars | March 31, 2026 | March 31, 2025 | ||||||
| Net cash provided by operating activities: | ||||||||
| Net loss | (3,582,571 | ) | (5,681,353 | ) | ||||
| Non-cash adjustments | 3,239,977 | 2,384,745 | ||||||
| Change in operating assets and liabilities | (1,969,342 | ) | (2,806,766 | ) | ||||
| Net cash used in operating activities | (2,311,936 | ) | (6,103,375 | ) | ||||
| Net cash used in investing activities | (54,189 | ) | (872,804 | ) | ||||
| Net cash provided by financing activities | 18,159,697 | 22,406,019 | ||||||
| Net change in cash | 15,793,572 | 15,429,841 | ||||||
| Effect of exchange rate on cash | (1,390,912 | ) | 25,412 | |||||
| Cash at beginning of year | 9,603,020 | 6,623,535 | ||||||
| Cash at end of year | 24,005,680 | 22,078,788 | ||||||
Cash Flows from Operating Activities
During the three months ended March 31, 2026, net cash used in operating activities was $2,311,936 resulting from our net loss of $3,582,571 partially offset by non-cash charges of $3,239,977 primarily driven by depreciation charges, operating lease expense and stock compensation expense. We had cash used in our operating assets and liabilities of $1,969,342 primarily driven by increases in prepaid and other assets offset by increase in deferred revenue and decrease in accounts payables.
During the three months ended March 31, 2025, net cash used in operating activities was $6,103,374 resulting from our net loss of $5,681,353 partially offset by non-cash charges of $2,384,745 primarily driven by depreciation charges, operating lease expense and stock compensation expense. We had cash used in our operating assets and liabilities of $2,806,766 primarily driven by increases in inventory, prepaid and other assets offset by a decrease in accounts receivables and increase in deferred revenue.
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Cash Flows from Investing Activities
During the three months ended March 31, 2026, we had net cash used in investing activities of $54,189 in purchase of property and equipment.
During the three months ended March 31, 2025, we had net cash used in investing activities of $872,804 in purchase of property and equipment.
Cash Flows from Financing Activities
Net cash provided by financing activities was $18,159,697 for the three months ended March 31, 2026, compared to $22,406,019 for the three months ended March 31, 2025. Financing activities during the current period were primarily driven by net proceeds of $18,446,498 from Private Investment in Public Equity, partially offset by net repayments under the bank overdraft facility of $286,801.
During the three months ended March 31, 2025, we had net cash provided by financing activities of $22,406,019, which comprised of proceeds from $28,000,000 from issuance of convertible notes to our principal shareholder offset by repayment of convertible notes to principal shareholder and other investors amounting to $4,212,637 and $1,068,849 respectively, partially offset by net repayments under the bank overdraft facility of $312,495.
Critical Accounting Policies
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
We consider the policies discussed below to be critical to an understanding of our condensed consolidated financial statements, as their application places the most significant demands on management’s judgment regarding matters that are inherently uncertain at the time an estimate is made.
These policies include fair value of stock options and standalone selling price in case of bundled revenue contracts.
These accounting policies, estimates and the associated risks are set out below. Future events may not develop exactly as forecasted and estimates routinely require adjustment.
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Stock Compensation Expense
Under the fair value recognition provisions of ASC Topic 718, Compensation-Stock Compensation, cost is measured at the grant date based on the fair value of the award and is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.
Determining the fair value of stock-based awards at the grant date requires significant judgment, including estimating the expected term over which the stock awards will be outstanding before they are exercised and the expected volatility of our stock.
As of March 31, 2026, the Company has issued two types of equity incentives:
Stock Options: These provide employees with the right, but not the obligation, to purchase shares of the Company’s stock at a specified price, within a defined period, as per the terms of the stock option agreement. Stock-based compensation expense associated with the Company’s 2016 Stock Incentive Plan is measured at fair value using a Black-Scholes option-pricing model at commencement of each offering period and recognized over that offering period.
Stock Units (Restricted Stock Units, or RSUs): These do not require the employee to exercise any options. Each stock unit automatically converts into a specified number of shares upon vesting. The Company uses last three months’ average share price of common stock on OTC (prior to April 24, 2025) or on NASDAQ (subsequent to April 24, 2025) as grant date fair value for RSUs.
Standalone Selling Price
Our system sale arrangements contain multiple products and services, including system, accessories, instruments and services. Other than services, we generally deliver all of the products upfront. Each of these products and services is a distinct performance obligation. System, instruments, accessories and services are also sold on a standalone basis. For multiple-element arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices at which we separately sell the products or services. If a standalone selling price is not directly observable, then we estimate the standalone selling prices considering market conditions and entity-specific factors including, but not limited to, historical pricing data, features and functionality of the products and services and industry benchmark. We regularly review standalone selling prices and maintain internal controls over establishing and updating these estimates. Revenue that is allocated to the service obligation is deferred and recognized ratably over the service period upon expiration of first year of service which is free and included in the system sale arrangements.
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 are material to investors.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
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Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures and internal control over financial reporting, 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 March 31, 2026.
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 and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Based on the evaluation performed as of March 31, 2026, as a result of the material weaknesses in internal control over financial reporting that are previously disclosed under “Part II - Item 9A - Controls and Procedures” in our Annual Report on Form 10-K for the year ended December 31, 2025, our Chief Executive Officer and Chief Financial Officer determined that our disclosure controls and procedures were not effective as of such date in that:
| ● | We failed to design adequate controls and procedures to provide reasonable assurance that U.S. GAAP was being properly applied to the matters resulting into the restatement of our quarterly financial statements, including recognition of revenue in case of deferred payment sales, recognition of right of use of certain assets and lease liabilities and functional and other classifications, also leading to certain accounting errors as described in details in the restatement notes as included in the respective amended quarterly financial statements. |
| ● | We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. |
| ● | We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. |
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Remediation Plan
The Company has been addressing and remediating these material weaknesses with the support and assistance of the accounting and financial staff employed by our Indian operating subsidiary. We have enhanced the review process for significant transactions to ensure proper accounting treatment under applicable guidelines and have engaged the external experts to provide guidance to the Company staff in the areas of financial reporting, internal controls, and enterprise risk management and assist it in the application of accounting principles to complex transactions. This external expert group is also helping the Company in strengthening its existing internal controls, policies and Standard Operating Procedures (“SOPs”) in all the major functional areas.
In addition, we have also engaged services of external experts in the field of designing, development and implementation of a comprehensive cloud-based ERP system. The ERP implementation process involves a detailed process study of each of the business functions and engagement with their respective process owners, identifying their linkages with other business functions and designing report formats, data sourcing and customizing the ERP system and training of the respective teams to meet the business data flow and reporting requirements of each business function. Post completion of roll out of all the functional modules under this new cloud-based ERP system which is designed to integrate all business functions within the accounting and financial department would help us in further addressing the abovementioned weaknesses.
Our Chief Executive Officer and Chief Financial Officer do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, 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 any control system is subject to 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 fact that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Controls Over Financial Reporting
Except for the remediation efforts described above, there were no changes in our internal controls over financial reporting that occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
In addition to matters which have been reported in the Company’s previous periodic filings under the Securities Exchange Act of 1934, as amended, from time to time, the Company 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 the Company’s business.
Item 1A. Risk Factors.
As a “smaller reporting company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable
Item 5. Other Information.
Item 6. Exhibits.
| Exhibit No. | Description of Exhibit | |
| 31.1 | Section 302 Certification – Chief Executive Officer(1) | |
| 31.2 | Section 302 Certification – Chief Financial Officer(1) | |
| 32.1 | Section 906 Certification – Chief Executive Officer(1) | |
| 32.2 | Section 906 Certification – Chief Financial Officer(1) | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| (1) | Filed herewith. |
| * | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: May 13, 2026 | SS INNOVATIONS INTERNATIONAL, INC. | |
| By: | /s/ Millan Rao | |
| Millan Rao | ||
| Group Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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