AVRA MEDICAL ROBOTICS, INC. Management report and analysis of the financial situation and operating results. (Form 10-K)

Results of Operations


The financial statements appearing elsewhere in this prospectus have been prepared on the assumption that the Company will continue as a going concern. The Society was recently created and has not established enough business or income to support the Society. These conditions raise substantial doubts as to the Company’s ability to continue operations.

The following table provides selected financial data about our company as of
December 31, 2020 and December 31, 2019:

Balance Sheet Data                As of              As of
                               December 31,      December 31,
                                   2020              2019

Cash                          $      160,709     $      28,474
Total Assets                  $      317,870     $     132,524
Total Liabilities             $    1,186,919     $   1,195,782
Total Stockholders' Deficit   $      869,049     $  (1,063,258 )

To date, the Company has relied on debt and equity raised through private offerings to fund its operations and no other sources of capital have been identified or sought. If we experience a shortage of working capital, we may have to limit our research and development and marketing activities.


Year ended December 31, 2020 compared to the year ended December 31, 2019

Revenues. We have had no income in the years ended December 31, 2020 and
December 31, 2019.

Research and development expenses. Research and development expenses for 2020 were $3,000 were, compared to $60,874 for 2019, primarily reflecting the company’s prototype system build efforts. The reduction in research and development expenses from 2019 to 2020 is mainly the result of a decline in the price of the Company’s shares, the majority of research and development expenses being paid with these same shares.

Compensation expense. Compensation expense for the year ended December 31, 2020
has been $812,190a decrease of $1,697,602. Compensation expense includes stock-based compensation

General and administrative expenses. We engaged $287,737 general and administrative expenses during the year ended December 31, 2020compared to
$752,018 for the year ended December 31, 2019. The decrease in general and administrative expenses is mainly the result of reductions in research and development expenses and compensation from 2020 to 2019.

Other income (expenses). We recorded a net negative of ($21,754) in 2020, against a net negative of ($19,741) other expenses in 2019. The negative net number for 2020 is mainly attributable to the loss of investment, partly offset by the cancellation of a PPP loan, while the negative net number for 2019 is mainly attributable to the expenses of ‘interests.

Net loss. We suffered a net loss of ($1,124,681) for 2020 compared to a net loss of ($3,385,973) for 2019. The decrease in net loss from 2020 to 2019 is mainly due to the reduction in research and development and compensation expenses.

Cash and capital resources

The Company expects to need substantial funds for research and development in order to continue to develop its initially proposed medical robotic system. The Company plans to meet its operating cash requirements by raising additional funds through the sale of our securities and, if possible on favorable terms, by entering into development partnerships to assist the Company in its technology development activities. .

During the period from creation (February 4, 2015) through December 31, 2019the Company raised (a) $1,900 an initial private offering of its ordinary shares in February 2017; (b) $480,000 of the private offering of convertible bonds made in June 2017; (vs) $135,000 a private offer of 135,000 common shares at a price of $1.00 per action carried out in
February 2017; (D) $542,260 of a private offer of 433,808 shares in the context of a private offer at the price of $1.25 per action carried out in September 2017; summer) $20,000 the private sale of 16,000 common shares of our company at a price of $1.25 per share in August 2018.

In March 2019the Company sold 7.5 Units in a private placement of ten (10) units (“Units”), each Unit consisting of one $10,000 a promissory note in the principal amount of six months bearing interest at the rate of 5% per annum and a three-year warrant to purchase 5,000 common shares at an exercise price of $1.25
per share.

In addition to the above, December 2018 through October 2020the Company has obtained sixteen loans from Barry F. Cohenour managing director totaling
$497,700. The loans were due 12 months after the financing date and did not bear interest. With the exception of two loans totaling $145,000all of these loans were then fully repaid via conversions into shares or restricted company shares, including a loan for $100,000 used to exercise a stock subscription option relating to 1,000,000 shares held by Mr Cohen.

On October 26, 2020AVRA has issued an aggregate of 256,027 units (“Units”) at a price of $1.00 per Unit in a private offering (the “Offering”) to four “accredited investors”. Each Unit consisted of (a) four shares of our common stock (“Shares”); (b) a three-year warrant to purchase five Shares at an exercise price of $0.40 per Share; and (c) an option to sell their Membership Units in Avra Air LLC for one share of our common stock. As a result of the above, investors received a total of 1,024,108 Shares, warrants to purchase 1,280,135 Shares and put options for 256,027 Shares.


On December 22, 2020 an accredited investor and the CEO have invested $25,000 and
$202,700respectively, in 227,700 Units at the price of $1.00 per Unit in a private placement (the “Placement”). Each Unit consisted of (a) four shares of our ordinary stock; and (b) a three-year warrant to purchase five Shares at an exercise price of $0.40 by Share. As a result of the above, they received a total of 910,800 shares and warrants to purchase 1,138,500 shares. The CEO used a total of $202,700 of Bonds owed to it by the Company to purchase such Units.

Although we have been successful in raising funds to fund our operations from inception and believe that we will be successful in obtaining the necessary funding to fund our operations in the future, we have no committed sources of funding and there can be no assurance that we will be able to secure additional funding. The accompanying financial statements have been prepared on the assumption that the Company will continue as a going concern; however, should the above-noted efforts fail, it would raise substantial doubt as to the Company’s ability to continue as a going concern. If we are unable to obtain financing, we may be forced to further reduce our operations or consider other strategic solutions. Even if we are successful in raising the additional financing, there is no guarantee as to the terms of any additional investment and any such investment or other strategic alternative would likely significantly dilute our current shareholders.

Critical Accounting Policies

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles in United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and information about contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the period reporting. Actual results could differ from these estimates. Significant estimates included deferred revenue, costs incurred related to deferred revenue, useful life of property, plant and equipment, and useful life of intangible assets.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method, deferred taxes are determined on the basis of the estimated future tax effects of the differences between the financial statements and the tax value of the assets and liabilities taking into account the provisions of the tax laws in force. Deferred tax provisions and benefits are based on changes in assets or liabilities from one year to another. In providing for deferred taxes, the Company takes into account the tax regulations of the jurisdictions in which the Company operates, estimates of future taxable profits and available tax planning strategies. If tax regulations, results of operations or the ability to implement tax planning strategies vary, adjustments to the carrying amount of deferred tax assets and liabilities may be required. Valuation allowances are recognized related to deferred tax assets based on the “more likely than not” criteria of ASC 740.

ASC 740-10 requires the Company to recognize the benefit of a tax position in the financial statements only after determining that the competent tax authority would more likely than not maintain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% probability of being realized upon final settlement with the tax authority competent.

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 our financial condition, our revenues or expenses, our results of operations, our liquidity, capital expenditures or capital resources that are important to investors.

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