SSII 10-K & 10-Q changes, risk factors and insider trading

The Company is engaged in the business of developing, manufacturing, manufacturing, and selling a surgical robotic system under our proprietary brand “SSi Mantra,” together with allied related accessories and a wide range of surgical instruments capable of supporting cardiac and a variety of other surgical procedures under our proprietary brand “SSi MudraMudra.”. 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 further consolidated our installed base of SSi Mantra in various parts of India and also expanded our presence in the global markets.

The consolidated financial statements appearing elsewhere in this reportAnnual Report have been prepared assuming that the Companywe will continue as a going concern. TheWe Company isare still in itsour initial years of revenue generation by way of the sale of itsour product and hashave not yet established consistent operational revenue cash flows to meet all its our fixed operating costs and hence may continue to incur losses for some time. These conditions raise substantial doubt about theour Company’s ability to continue as a going concern.

Revenues. During the year ended December 31, 2024,2025, the Company had revenues of $42,484,747 (comprising $38,353,048 of system sales, $3,183,757 of instrument sales, $877,033 of warranty sales and $70,909 of lease income), compared to revenues of $20,649,528 (comprising $19,457,767 of system sales, $942,548 of instrument sales andsales, $177,518 of warranty sales and $71,695 of Leaselease income), compared to revenues of $5,875,314 (comprising $5,225,777 of system sales, $647,766 of instrument sales and $1,771 of warranty sales) during the year ended December 31, 2023.The2024. The increase in revenue is primarily due to sale of increased number of surgical robotic systems and instruments in the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024.

Our Selling, General and Administrative expenses (“SG&A”) comprise 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 acquisition-related costs, 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 grant of our equity awards to members of our board of directors. We expect our SG&A costs to increase as we continue to strengthen our support and enabling functions and invest in leadership development, performance management management and training programs. The increase in selling, general and administrative expenses resulted from the increased manpower strength and and an increased scale of commercial operations during 20242025 as compared to the year ended December 31, 2023.2024.

Other Income (Expenses). We have incurredrecognized $175,235$33,087 in interest expensesincome (net) during the year ended December 31, 2024,2025, as compared to an interest expense (net) of $604,308$175,235 during the year ended December 31, 2023.2024. The decrease in interest expense (net) from 2023 to 2024 is due to increase in interest income onby $343,724 relating to fixed deposits withwhich HDFCis bankoffset by increase in India and interest incomeexpense recognizedby during the year$135,402 related to deferredinterest paymenton sales.our bank overdraft facility and convertible notes.

Net Loss. We incurred a net loss of $12,127,387 for the year ended December 31, 2025, compared to a net loss of $19,151,197 for the year ended December 31, 2024,2024. asThe compareddecrease to ain net loss of $20,878,292$7,023,810 forwas theprimarily year ended December 31, 2023. The decrease in net loss from 2023attributable to 2024 is primarily due toan increase in gross profit of $7,726,838,$11,091,889 and a decrease in stock-based compensation expense of $6,214,681. These favorable variances were partially offset by increaseincreases in stockresearch compensationand expense anddevelopment expenses of $4,619,292$1,194,069, depreciation expense of $639,902, selling, general and decreaseadministrative inexpenses interestof $4,690,671, and income tax expense (net) of $ 175,235 from $ 604,308 respectively.$3,966,440.

Net cash used in operating activities was $9,503,030$18,542,987 for for the year ending 31ended December 2024,31, 2025, compared to $15,361,645$ 9,503,030 for the year ending 31ended December 2023,31, 2024, representing an increase of $9,039,957 year over year, reflecting lowerthe increase in net cash lossesused andin decrease inoperating activities was primarily driven by higher working capital needsrequirements associated duewith tothe increasedCompany’s expanded scale of operations.operations, which more than offset improvements in operating results. The major drivers contributing to the decreaseincrease of $5,858,615$9,039,957 in net cash used in operating activities year-over-year included the following:

Stock Options: These provide employees with the right, but not the obligation, to purchase shares of the Company’sour stock at a specified price, within a defined period, as per the terms of the stock option agreement. Stock-based compensation expense associated with AVRAour 2016 Stock Incentive Plan is measured at fair-value 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. TheWe Company usesuse last three months’ average share price of common stock on OTC exchange(prior to April 24, 2025) or on Nasdaq (subsequent to April 24, 2025) as grant date fair value for RSUs.

Standalone Selling Price:

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 isare material to investors.

TheWe Company isare engaged in the business of developing, manufacturing, and selling a surgical robotic system under ourits 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 its 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 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 havingachieve lower costs of production which eventually helps us and make our surgical robotic system cost effective and relatively affordable.

During the threesix months ended MarchJune 31,30, 2026, we sold 1846 SSi Mantra surgical robotic systems andsystems, installed 31 systemssystem on a pay-per-use basis and upgraded 23 systems.

The financial statements appearing elsewhere in this report have been prepared assuming that the Companywe will continue as a going concern. TheWe Company isare still in itsour initial years of revenue generation by way of the sale of itsour product and hashave 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’sour ability to continue as a going concern.

To date, thewe Company hashave mainly relied on debt and equity raised in private and public offerings to finance its operations. During the balance of the year ending December 31, 2026, thewe Company plansplan to raise additional capital through further private or public offerings of itsour 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 MarchJune 31,30, 2026, as compared to the three months months ended MarchJune 31,30, 2025

Total Revenue. For the three months ended ended MarchJune 31,30, 2026,we2026, we had revenues of $11,101,366$13,939,709 (comprised of $9,575,370$12,361,986 of system sales, $1,151,228$1,142,525 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$419,002 of warranty sales and lease income $18,416$16,196), compared to revenues of $10,000,305 (comprising $8,781,038 of system sales, $1,007,830 of instrument sales, $193,359 of warranty sales and lease income $18,078), during the three months ended MarchJune 31,30, 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,June 30, 2026, as compared to the three months ended MarchJune 31,30, 2025.

StockStock-based compensation expense. We had stock-based stock compensation expenses of $3,144,315$2,178,156 and $2,379,212$1,630,295 during the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase increase in stockstock-based 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’sour 2016 Stock Incentive Plan.

Depreciation and amortization expense. We had depreciation and amortization expense of $323,747$346,364 for three months ended MarchJune 31,30, 2026, as compared to $208,882$260,361 for three months ended endedJune March 31,30, 2025. The increase in depreciation and amortization expense was primarily attributable to an increase in fixed assets during during the current period.

Selling, general and administrative expense. We incurred $4,502,476$4,452,090 in selling, general and administrative (“SG&A”) expense during the three months ended MarchJune 31,30, 2026, as compared to $3,410,872$3,428,788 for the three months ended MarchJune 31,30, 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 expenseexpenses 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,income, net. We have recognized $207,538$115,280 in interest income (net) for the three months ended MarchJune 31,30, 2026, as compared to $240,500$24 during the three months ended MarchJune 30, 31, 2025. The decreaseincrease in net income was primarily attributable to the decreaseincrease in interest expenseincome on convertiblesales notesand duringfixed 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.deposits.

Income tax expense. For the three months ended MarchJune 31,30, 2026, our income tax expense increasedwas by $151,352 $505,276 as compared to nil$353,729 duringfor the three months period ended MarchJune 31, 30, 2025, The increase is primarily due to increase in the recognitiontaxable profits arising from the Indian operations resulting in increase 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 $2,661,350 for the three months ended MarchJune 31, 30, 2026, as compared to a net loss of $5,681,353$256,691 for the three months ended MarchJune 31,30, 2025. The decrease increase in net loss from MarchJune 31,30, 2026 to March 31,June 30, 2025 is primarily the result of an increase in gross profit by $4,240,013 and reduction in Researchresearch & development expense byof $14,655 offset by increases in$1,897,094, SG&A expense byof $1,091,604,$1,023,302, Stock stock-based compensation expense byof $765,103, Depreciation$547,861, depreciation and amortization expense of $114,865$86,003 and income tax expense of $151,352.$151,547 offset by an increase in gross profit by $1,185,892.

TheWe Company expectsexpect to require substantial funds for scaling up itsour operations, for incurring capital expenditure to have itsour own in-house machining and tooling capacity and to continue to finance itsour research and development work in the field of surgical robotics.

During the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities was $2,311,936$6,546,449 resulting from our net loss of $3,582,571$6,243,921 partially offset by non-cash charges of $3,239,977 $5,735,820 primarily driven by depreciation charges, operating lease expense and stockstock-based compensation expense. We had cash used in our operating assets and liabilities of $1,969,342$6,038,348 primarily driven by increases in accounts receivables, prepaid and other assetsassets, inventory and decrease accounts payables offset by increase in deferred revenue and decreaseincome intaxes accounts payables.payable.

During the threesix months ended MarchJune 31, 30, 2025, net cash used in operating activities was $6,103,374$9,555,703 resulting from our net loss of $5,681,353$5,938,044 partially offset by non-cash charges of $2,384,745$4,149,120 primarily driven by depreciation charges, operating lease expense and stockstock-based compensation expense. We had cash used in our operating assets and liabilities of $2,806,766$7,766,779 primarily driven by increasesincrease in inventory, prepaid and other assets offset by a decrease inand accounts receivables andoffset by increase in deferred revenue, revenue.accounts payable, accrued expenses and other liabilities.

During the threesix months ended MarchJune 31,30, 2026, we we had net cash used in investing activities of $54,189$215,060 in purchase of property and equipment.

During the threesix months ended MarchJune 31,30, 2025, we had net cash used in investing activities of $872,804$1,189,452 in purchase of property and equipment.

Net cash provided by financing activities was $18,159,697$21,638,510 for the threesix months ended MarchJune 31,30, 2026, compared to $22,406,019$21,703,921 for the threesix months ended MarchJune 31,30, 2025. Financing activities during the current period were primarily driven by net proceeds of $18,446,498 from Privatea Investmentprivate placement completed in PublicMarch Equity,2026, partiallyand offsetproceeds byreceived net repayments under thefrom bank overdraft facility of $286,801.$3,192,012.

During the threesix months ended MarchJune 31,30, 2025, we we had net cash provided by financing activities of $22,406,019,$21,703,921, which comprised of proceeds fromof $28,000,000 from issuance of convertible notes to our principal shareholder offset by repayment of convertible notes to our principal shareholder and other investors amounting to to $4,212,637 and $1,068,849 respectively,respectively partiallyand offsetrepayment by net repayments under theof bank overdraft facilityby of $312,495.$1,014,593.

StockStock-based Compensation Expense

As of MarchJune 31,30, 2026, thewe Company hashave issued two types of equity incentives:

Stock Options: These provide employees with the right, but not the obligation, to purchase shares of theour Company’scommon 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’sour 2016 Stock Incentive Plan and its 2026 Stock Incentive Plan (adopted in April 2026) 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 UnitsAwards (Restricted Stock Units,Awards, or RSUsRSAs): These do not require the employee to exercise any options. Each stock unit automatically converts into a specified number of shares upon vesting. TheWe Companyuse usesthe last three months’month’s average share price of common stock on OTC (prior to April 24, 2025) or on NASDAQ Nasdaq (subsequent to April 24, 2025) as grant date fair value for RSUs.