10-Q 1 f10q0313_avrasurgical.htm QUARTERLY REPORT f10q0313_avrasurgical.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

S QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: March 31, 2013

o    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________
Commission file number 000-52330

 
AVRA SURGICAL ROBOTICS, INC.
  
 
(Exact name of registrant as specified in its charter)
  
 
Delaware
  
35-2277305
(State or other jurisdiction
  
(I.R.S. Employer Identification Number)
of incorporation or organization)
    
 
 
c/o Stamell & Schager, LLP, 1 Liberty Plaza, 23rd Floor, New York, NY 10006
  
 
(Address of principal executive offices)
  
     
 
(212) 566-4047
  
 
(Registrant’s telephone number, including area code)
  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No o.
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes x    No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
 
Large accelerated filer
o
Accelerated filer
o
 
Non-accelerated filer
o
Smaller reporting company
x.
(Do not check if a smaller reporting company)
    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o   No x.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 40,422,114 shares of common stock, par value $.0001 per share, outstanding as of May 9, 2013.
 
 
 
 
 
AVRA SURGICAL ROBOTICS, INC.

- INDEX -
 
     
Page
PART I – FINANCIAL INFORMATION:
    
       
Item 1.
Consolidated Financial Statements:
    
       
 
Balance Sheets as of March 31, 2013 (Unaudited) and December 31, 2012
  
1
       
 
Statements of Operations (Unaudited) for the Three Months Ended March 31, 2013 and 2012, and for the Period from August 29, 2006 (Inception) through March 31, 2013
  
2
       
 
Statements of Comprehensive Loss (Unaudited) for the Three Months Ended March 31, 2013 and 2012, and for the Period from August 29, 2006 (Inception) through March 31, 2013
  
3 
       
 
Statement of Stockholders’ Equity/(Deficiency) for the Period August 29, 2006 (Inception) through March 31, 2013 (Unaudited)
  
4
       
 
Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2013 and 2012 and for the Period August 29, 2006 (Inception) through March 31, 2013
  
5
       
 
Notes to Financial Statements
  
6
       
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
  
12
       
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
  
15
       
Item 4.
Controls and Procedures
  
15
       
PART II – OTHER INFORMATION:
    
       
Item 1.
Legal Proceedings
  
17
       
Item 1A.
Risk Factors
  
17
       
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
  
17
       
Item 3.
Defaults Upon Senior Securities
  
18
       
Item 4.
Mine Safety Disclosures
  
18
       
Item 5.
Other Information
  
18
       
Item 6.
Exhibits
  
18
       
 
SIGNATURES
  
19
 
 
 
 

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements.
 
AVRA SURGICAL ROBOTICS, INC.
  
(A Development Stage Company)
  
CONSOLIDATED BALANCE SHEETS
  
             
   
March 31,
2013
Unaudited
    
December 31,
2012
  
             
Assets
            
Current Assets
            
 Cash
  
$
540,850
    
$
406,565
  
 Prepaid expenses
    
139,116
      
10,000
  
 VAT refund receivable
    
97,965
      
94,551
  
Total Current Assets
    
777,931
      
511,116
  
                 
Property and Equipment
                
 Machinery and equipment, net of accumulated depreciation of $21,274 and $10,637, respectively
    
174,974
      
190,249
  
                 
Other Assets
                
 Security deposit
    
10,493
      
10,493
  
 Patents, net of accumulated amortization of $2,348 and $1,174, respectively
    
222,234
      
139,651
  
Total Other Assets
    
232,727
      
150,144
  
                 
Total Assets
  
$
1,185,632
    
$
851,509
  
                 
Liabilities and Stockholders' Equity/(Deficiency)
          
Current Liabilities
                
 Accounts payable and accrued expenses
  
$
2,564,982
    
$
1,808,049
  
 Loan payable - affiliate
    
1,632,349
    
$
1,487,780
  
 Loan payable - stockholder
    
34,738
      
34,832
  
Total Current Liabilities
    
4,232,069
      
3,330,661
  
                 
Total Liabilities
    
4,232,069
      
3,330,661
  
                 
Commitments and Contingencies
    
-
      
-
  
                 
Stockholders' Equity/(Deficiency)
                
Preferred stock, $.0001 par value; 10,000,000 shares authorized;
          
none issued and outstanding
    
-
      
-
  
Common stock, $.0001 par value; 100,000,000 shares
          
authorized; 40,422,114 and 38,479,238 shares, issued and outstanding, respectively
    
4,042
      
3,848
  
 Additional paid-in capital
    
6,784,092
      
4,873,177
  
 Deficit accumulated during the development stage
    
(8,899,907
 )    
(6,730,018
)
Accumulated other comprehensive (loss)
    
(40,651
)
    
(48,283
)
                 
 Controlling interest
    
(2,152,424
)
    
(1,901,276
)
                 
 Noncontrolling interests
    
(894,013
)
    
(577,876
)
                 
Total Stockholders' Equity/(Deficiency)
    
(3,046,437
)
    
(2,479,152
)
                 
Total Liabilities and Stockholders' Equity/(Deficiency)
  
$
1,185,632
    
$
851,509
  
 
See Notes to Consolidated Financial Statements
 
 
1
 
 
AVRA SURGICAL ROBOTICS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
                   
   
For the
Three Months
Ended
March 31, 2013
    
For the
Three Months
Ended
March 31, 2012
    
For the Period
August 29, 2006 (Inception)
Through
March 31, 2013
  
Revenues
  
$
-
    
$
-
    
$
-
  
Expenses:
                        
Research and development
    
1,428,119
      
-
      
4,125,411
  
General and administrative expenses
    
1,059,815
      
13,932
      
5,652,593
  
(Loss) before other income/expenses
    
(2,487,934
)
    
(13,932
)
    
(9,778,004
)
                         
Other (income)
    
-
      
-
      
(4,056
)
Interest expense
    
-
      
-
      
16,273
  
(Loss)before (benefit) from income taxes
    
(2,487,934
)
    
(13,932
)
    
(9,790.221
)
Benefit from income taxes
    
-
      
-
      
-
  
Net (Loss)
  
$
(2,487,934
)
  
$
(13,932
)
    
(9,790,221
)
Less: Net (loss) attributable to noncontrolling interests
    
(318,045
) 
    
-
      
(890,314
) 
Net (Loss) Attributable to AVRA Surgical Robotics, Inc.
  
$
(2,169,889
)
  
$
(13,932
)
  
$
(8,899,907
)
Basic and Diluted (Loss) Per Share
  
$
(0.12
)
  
$
(0.01
)
        
                         
Weighted Average Number of Common Shares Outstanding
    
17,483,363
      
2,500,000
          
 
See Notes to Consolidated Financial Statements
 
 
2
 
 
AVRA SURGICAL ROBOTICS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Unaudited
                   
   
For the
Three Months
Ended
March 31, 2013
    
For the
Three Months
Ended
March 31, 2012
    
For the Period
August 29, 2006 (Inception)
Through
March 31, 2013
  
                   
Net (loss)
  
$
(2,487,934
)
  
$
(13,932
)
  
$
(9,790,221
)
                         
Foreign currency translation adjustments
    
9,540
      
-
      
(50,814
)
                         
Comprehensive (loss)
    
(2,478,394
)
    
(13,932
)
    
(9,841,035
)
                         
Less: comprehensive (loss) attributable to noncontrolling interests
    
(316,137
)
    
-
      
(900,477
)
                         
Comprehensive (loss) attributable to AVRA Surgical Robotics, Inc.
  
$
(2,162,257
)
  
$
(13,932
)
    
(8,940,558
)
 
See Notes to Consolidated Financial Statements
 
 
3
 
 
AVRA SURGICAL ROBOTICS, Inc..
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY/(DEFICIENCY)
For the Period August 29, 2006 (Inception) Through March 31, 2013
 
   
Common Stock
    
Subscription
    
Additional
Paid-In
    
Deficit Accumulated During the Development
    
Accumulated Other Comprehensive
    
Noncontrolling
    
Total
Equity/
  
   
Shares
    
Amount
    
Receivable
    
Capital
    
Stage
    
(Loss)
    
Interests
    
(Deficiency)
  
                                                 
August 29, 2006 - common stock subscription
    
2,500,000
    
$
250
    
$
(250
)
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
August 31, 2006 – contributed capital
    
-
      
-
      
250
      
29,750
      
-
      
-
      
-
      
30,000
  
Net (Loss)
    
-
      
-
      
-
      
-
      
(28,511
)
    
-
      
-
      
(28,511
)
                                                                 
Balance at December 31, 2006
    
2,500,000
      
250
      
-
      
29,750
      
(28,511
)
    
-
      
-
      
1,489
  
Net (Loss)
    
-
      
-
      
-
      
-
      
(34,932
)
    
-
      
-
      
(34,932
)
                                                                 
Balance at December 31, 2007
    
2,500,000
      
250
              
29,750
      
(63,443
)
    
-
      
-
      
(33,443
)
Net (Loss)
    
-
      
-
      
-
      
-
      
(30,801
)
    
-
      
-
      
(30,801
)
                                                                 
Balance at December 31, 2008
    
2,500,000
      
250
      
-
      
29,750
      
(94,244
)
    
-
      
-
      
(64,244
)
Net (Loss)
    
-
      
-
      
-
      
-
      
(29,912
)
    
-
      
-
      
(29,912
)
                                                                 
Balance at December 31, 2009
    
2,500,000
      
250
              
29,750
      
(124,156
)
    
-
      
-
      
(94,156
)
Net (Loss)
    
-
      
-
      
-
      
-
      
(30,732
)
    
-
      
-
      
(30,732
)
                                                                 
Balance at December 31, 2010
    
2,500,000
      
250
      
-
      
29,750
      
(154,888
)
    
-
      
-
      
(124,888
)
September 16, 2011- Conversion of Loans Payable and Related Accrued Interest to Additional Paid-In Capital
    
-
      
-
      
-
      
143,683
      
-
      
-
      
-
      
143,683
  
                                                                 
September 16, 2011-Sale of Common Stock
    
2,500,000
      
250
      
-
      
24,750
      
-
      
-
      
-
      
25,000
  
September 16, 2011-Purchase of Common Stock
    
(2,500,000
)
    
(250
)
    
-
      
(24,750
)
    
-
      
-
      
-
      
(25,000
)
Net (loss)
    
-
      
-
      
-
      
-
      
(29,103
)
    
-
      
-
      
(29,103
)
                                                                 
Balance at December 31, 2011
    
2,500,000
      
250
      
-
      
173,433
      
(183,991
)
    
-
      
-
      
(10,308
)
Common stock issuance - founders
    
33,419,254
      
3,342
      
-
      
-
      
-
      
-
      
-
      
3,342
  
Sale of stock in subsidiary to related parties
    
-
      
-
      
-
      
-
      
-
      
-
      
6,464
      
6,464
  
Stock based compensation - employees
    
2,000,000
      
200
              
2,999,800
                              
3,000,000
  
Common stock issuance - cash
    
559,984
      
56
      
-
      
1,699,944
      
-
      
-
      
-
      
1,700,000
  
Net (loss)
    
-
      
-
      
-
      
-
      
(6,546,027
)
    
-
      
(572,269
)
    
(7,118,296
)
Foreign Currency Translation
    
-
      
-
      
-
      
-
      
-
      
(48,283
)
    
(12,071
)
    
(60,354
)
                                                                 
Balance at December 31,2012
    
38,479,238
    
 
3,848
      
-
      
4,873,177
      
(6,730,018
)
    
(48,283
)
    
(577,876
)
    
(2,479,152
)
                                                                 
Common stock issuance - cash
    
1,002,376
      
100
      
-
      
1,725,300
      
-
      
-
      
-
      
1,725,400
  
Common stock issuance - founders
    
940,500
      
94
      
-
      
-
      
-
      
-
      
-
      
94
  
Stock based compensation
    
-
      
-
      
-
      
185,615
      
-
      
-
      
-
      
185,615
  
Net (loss)
    
-
      
-
      
-
      
-
      
(2,169,889
)
            
(318,045
)
    
(2,487,934
)
Foreign Currency Translation
    
-
      
-
      
-
      
-
      
-
      
7,632
      
1,908
      
9,540
  
                                                                 
 Balance at March 31, 2013
    
40,422,114
    
$
4,042
            
$
6,784,092
    
$
(8,899,907
)
  
$
(40,651
)
  
$
(894,013
)
  
$
(3,046,437
)
 
See Notes to Consolidated Financial Statements
 
 
4
 
 
AVRA SURGICAL ROBOTICS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
For the
Three Months
Ended
March 31, 2013
  
For the
Three Months
 Ended
March 31, 2012
  
For the Period
August 29, 2006 (Inception)
Through
March 31, 2013
  
Cash Flows from Operating Activities
  
Net (loss)
  
$
(2,487,934
)
  
$
(13,932
)
  
$
(9,790,221
)
Adjustments to reconcile net (loss) to net cash (used in) operating activities:
  
Stock based compensation expense
    
185,615
      
-
      
3,185,615
  
Depreciation
    
10,637
      
-
      
21,274
  
Amortization
    
1,174
      
-
      
2,348
  
Changes in operating assets and liabilities:
  
Increase in prepaid expenses
    
(129,116
)
    
-
      
(139,116
)
(Increase) in VAT refund receivable
    
(3,414
)
    
-
      
(97,965
)
Increase (decrease) in accounts payable and accrued expenses
    
756,933
      
3,000
      
2,564,982
  
Increase in accrued interest payable
    
-
      
-
      
16,273
  
                         
Net cash (used in) operating activities
    
(1,666,105
)
    
(10,932
)
    
(4,236,810
)
                         
Cash Flows from Investing Activities
  
Purchase of Machinery and Equipment
    
4,638
      
-
      
(196,248
)
Security deposits
    
-
      
-
      
(10,493
)
Patent costs incurred
    
(83,757
)
    
-
      
(224,582
)
                     
-
  
Net cash (used in) investing activities
    
(79,119
)
    
-
      
(431,323
)
                         
Cash Flows from Financing Activities
  
Professional fees paid by related party on behalf of the company
    
-
      
-
      
7,500
  
Proceeds from issuance of common stock
    
1,725,400
      
-
      
3,481,586
  
Proceeds from sale of shares in subsidiary
    
-
      
-
      
6,464
  
Redemption of common stock
    
-
      
-
      
(25,000
)
Proceeds from affiliate loans
    
144,569
              
1,632,349
  
Proceeds from stockholder loans
    
-
      
10,932
      
156,898
  
                         
Net cash provided by financing activities
    
1,869,969
      
10,932
      
5,259,797
  
                     
-
  
Effect of exchange rate changes on cash
    
9,540
              
(50,814
)
                         
Net increase in cash
    
134,285
      
-
      
540,850
  
                         
Cash at beginning of period
    
406,565
      
-
      
-
  
                         
Cash at end of period
  
$
540,850
    
$
-
    
$
540,850
  
                         
Supplemental Disclosures of Cash Flow Information
  
Cash paid for:
  
Interest
  
$
-
    
$
-
    
$
-
  
Income taxes
  
$
-
    
$
-
    
$
-
  
                         
Non-cash Financing Activities:
  
Conversion of loan payable - stockholder to common stock
  
$
94
    
$
-
    
$
2,250
  
Conversion of loans payable - stockholders and related accrued interest to additional paid-in capital
    
-
      
-
      
136,183
  
Conversion of loans payable - related party to additional paid-in capital
    
-
      
-
      
7,500
  
                         
 
 
$
94 
    
 $
-
    
$
145,933
  
 
See Notes to Consolidated Financial Statements
 
 
5
 
 
AVRA SURGICAL ROBOTICS, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
March 31, 2013

NOTE 1 - ORGANIZATION AND BUSINESS:
 
AVRA Surgical Robotics, Inc. ("AVRA Robotics" or the "Company"), including its 80% owned subsidiary MIS-Robotics GmbH (“MIS”), is a Development Stage Company. The Company's former Chief Executive Officer ("CEO") and former Chief Scientist and Technical Officer ("CSTO") own the remaining 20% of MIS equally. As of March 31, 2013, the Company has not generated any revenues from the development of its products and is therefore still considered to be a development stage company as defined in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 915 “Development Stage Entities”. The Company is devoting substantially all of its present efforts to design and manufacture commercially viable surgical robotic systems. All losses accumulated since incorporation on August 29, 2006 have been considered as part of the Company's development stage activities.
 
NOTE 2 - BASIS FOR PRESENTATION FOR INTERIM FINANCIAL STATEMENT:
 
The accompanying Interim Financial Statements have been prepared in accordance with accounting principles generally accepted for interim financial statement presentation and in accordance with the instructions to Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statement presentation. In the opinion of management, all adjustments for a fair statement of the results of operations and financial position for the interim period presented have been included. All such adjustments are of normal recurring nature. This financial information should be read in conjunction with the Financial Statements and notes thereon included in the Company’s form 10-K for the fiscal year ended December 31, 2012.
 
NOTE 3  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 
Principles of Consolidation:
The consolidated financial statements include the accounts of AVRA Surgical Robotics, Inc. and its 80% owned subsidiary MIS. All intercompany transactions and accounts have been eliminated in consolidation.
 
Use of Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
Loss per Common Share:
Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive. As of March 31, 2013, common stock equivalents consisted of warrants convertible into 950,000 shares of common stock.
 
 
6
 

NOTE 3  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
 
Patents:
Patents are stated at cost and depreciated on a straight line basis over the estimated lives of the respective assets.  The useful lives for patents are estimated to be twenty years from the filing date. 
 
Research and Development Costs:
Costs related to research, design and development of products are charged to research and development expense as incurred. The costs include direct salary costs for research and development personnel, costs for materials used in research and development activities and costs for outside services.
 
Software Development Costs:
Software development costs are included in research and development and are expensed as incurred. After technological feasibility is established, material software development costs are capitalized. The capitalized costs are then amortized on a straight-line basis over the estimated product life, or on the ratio of current revenue to total projected product revenue, whichever is greater. To date, the period between achieving technological feasibility, which the Company has defined as the establishment of a working model, which typically occurs when the verification and validation testing is complete, and the general availability of such software has been short and software development costs qualifying for capitalization have been insignificant. Accordingly, the Company has not capitalized any software development costs to date.
 
Stock Compensation Expense:
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with Accounting Standards Codification ("ASC") Topic 505, “ Equity ”.  Costs 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. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC Topic 505.  See Note 8
 
Concentration of Credit Risk:
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company’s cash is held in demand accounts at large financial institutions (of which $140,624 was held in a German bank). On occasion, deposits are in excess of insured limits. The Company has not experienced any historical losses on its deposits of cash and cash equivalents. 
 
 
 
7
 
 
Recent Accounting Pronouncements:
 
In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220)—Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (ASU 2013-02), to improve the reporting of reclassifications out of accumulated other comprehensive income. ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety from accumulated other comprehensive income to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. ASU 2013-02 is effective for the Company in its first quarter of fiscal 2014 with earlier adoption permitted, which should be applied prospectively. The Company does not expect that adoption of this guidance during fiscal 2014 will have a material impact on the Company’s consolidated financial position, results of operations or cash flows.
 
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
 
NOTE 4 -  GOING CONCERN:
 
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a development stage entity and has incurred a cumulative net loss from inception of  $9,790,221 and has a stockholders’ deficiency of $3,046,437 which, among other factors, raises substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon management’s plan to raise additional capital from the sale of stock, receive additional loans from its affiliate, and ultimately, income from operations. The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
 
NOTE 5  -  COMMON STOCK:
 
The Company is authorized to issue one hundred million (100,000,000) shares of common stock. On August 29, 2006 the Company sold two million five hundred thousand (2,500,000) shares of common stock to two investors for $250, which was paid on August 31, 2006.
 
On January 31, 2013, the Company sold to three investors, including the Company’s then President, 350,000 shares of common stock at par and issued warrants for 100,000 shares of common stock with an exercise price of $5.00 per share and expiring on December 31, 2016 to two of the investors and a warrant to purchase 400,000 shares of common stock with an exercise price of $5.00 per share and expiring on December 31, 2015 to the Company’s then President.
 
On February 12, 2013, the Company filed a Registration Statement with the SEC providing for the registration of up to $17,000,000 (net of $15,150,000 after expenses) of common stock to be offered to public stockholders. The filing can be referenced at www.sec.gov.  The number of shares to be issued is at present undetermined. The proceeds from the offering are expected to be used for research and development of the Company’s surgical robotic system as well as general and administrative expenses.
 
On February 20, 2013, the Company sold 633,597 shares of common stock to eleven investors for $950,400.

On March 12, 2013, the Company sold 117,371 shares of common stock to an investor for $250,000.
 
 
8
 
 
NOTE 5 – COMMON STOCK (CONTINUED):
 
On March 25, 2013, the Company sold (i) 234,742 shares of common stock to an investor for $500,000; (ii) 16,666 shares to an investor for $25,000; and  (iii) 590,500 shares of common stock to three investors at par and a warrant to purchase 400,000 shares of common stock, exercisable at an exercise price of $5.00 per share expiring on December 31, 2015 to one of the investors.

NOTE 6  -  PREFERRED STOCK:
 
The Company is authorized to issue ten million (10,000,000) shares of $.0001 par value preferred stock with designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors of the Company.
 
NOTE 7  -  WARRANTS:
 
Warrant activity is as follows:
  
   
Warrants
 outstanding
    
Weighted
average
exercise price
    
Weighted
average
remaining life
  
                   
Balance, January 1, 2013
     50,000     $ 5.00       3.75  
Granted
     900,000     $ 5.00       2.83  
Exercised
     -       -       -  
Cancelled
     -       -       -  
Balance, March 31, 2013 (fully vested)
     950,000     $ 5.00       2.88  
 
On January 31, 2013, the Company issued warrants for 100,000 shares of common stock with an exercise price of $5.00 per share and expiring on December 31, 2016 and a warrant for 400,000 shares of common stock with an exercise price of $5.00 per share, expiring on December 31, 2015. The warrants were outstanding at March 31, 2013.
 
On March 25, 2013, the Company issued a warrant for 400,000 shares of common stock with an exercise price of $5.00 per share and expiring on December 19, 2015. The warrant was outstanding at March 31, 2013.
 
NOTE 8  -  STOCK BASED COMPENSATION:

The Company uses the Black-Scholes pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards on the date of grant is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company’s expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rates and expected dividends. The estimated grant date fair values of the employee stock options for the periods presented were calculated using the Black-Scholes valuation model, based on the following assumptions:
 
   
Three months ended
March 31,
  
   
2013
  
Expected volatility
     56%  
Risk-free interest rate
     0.4%-0.6%  
Expected term (in years)
     3 - 4  
Expected dividend rate
     0%  
 
During the three months ended March 31, 2013 and 2012, stock-based compensation expense, reported as General and Administrative Expense, was $185,615 and $0 respectively.
 
 NOTE 9  -  RELATED PARTY TRANSACTIONS:
 
Agreement with Affiliated Company:
 
On October 22, 2012, MIS entered into a joint development and manufacturing agreement (the "Agreement") with RG Mechatronics GmbH (“RGM”) whereby RGM will provide to MIS all engineering services necessary to develop and manufacture robotic components and systems for medical applications, (collectively, the "Products"). The Company's former (as of March 1, 2013) CSTO is an officer and employee of RGM. The Agreement further provides that MIS will own all rights to intellectual property arising from RGM's performance under the Agreement, subject to RGM's nonexclusive, nontransferable, right in any area other than for medical purposes to exploit the intellectual property.
 
The term of the Agreement is the longer of (i) two years from October 22, 2012 or (ii) for each Product development which commences within two years from October 22, 2012, upon completion of the Product.
 
As part of the Agreement, MIS and RGM established a joint development committee ("JDC") with a representative from each party.  On October 23, 2012, the JDC met and agreed to (i) performance and design specifications of the Products, (ii) the budget for development of the Products, and (iii) the timeline for developing the Products.
 
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NOTE 9  -  RELATED PARTY TRANSACTIONS (CONTINUED):
 
Accounts payable includes $1,260,790 due to RGM under the Agreement. These amounts together with prior payments are disputed. For the three months ended March 31, 2013, the Company incurred $1,428,119 of research and development expenses with RGM, all of which has been charged to operations.
 
On April 8, 2013, the Company, through MIS, notified RGM of its intention to terminate the Agreement, subject to certain legal formalities. On the same date, RGM provided the Company, through MIS, a notice of immediate termination of the Agreement for cause.
 
Loans Due to Affiliated Entities:
 
Loan payable to affiliate ($1,632,349) and loan payable to stockholder ($34,738) represent amounts due to AVRA Surgical, Inc., and Granite Investor Group, Inc. respectively, each company majority owned by two of the Company’s officers and directors. The amounts represent advances to the Company to fund initial research and development expenses incurred under the Agreement between MIS and RGM. These amounts are unsecured, non-interest bearing and have no stipulated repayment terms.
 
One of the Company’s directors is also a partner of the legal firm used for much of the Company’s legal services.  For the three months ended March 31, 2013, legal fees incurred with the firm totaled $331,805.  As of March 31, 2013, such fees have not been paid and are reflected on the consolidated balance sheet as accounts payable.
 
 Employment Agreements:
 
The Company entered into separate individual employment agreements with the CEO and CSTO, each with a term of five (5) years ending on August 1, 2017 and an annual base salary of approximately $390,000. In addition, the Company will pay pension and other benefits as well as reimbursement of business expenses.
 
Effective February 8, 2013 the CEO resigned from his position and was appointed Senior Vice President for Marketing with his employment agreement remaining otherwise in full force and effect and a new CEO was appointed. On March 1, 2013, the CSTO terminated his employment agreement with the Company and resigned as an officer. On March 29, 2013, the CEO was appointed President of the Company in addition to his CEO role. On April 19, 2013, the Company served a complaint in a case filed in New York State court against its former CSTO.  The complaint alleges that the former CSTO breached his duty of loyalty to the Company by attempting to misappropriate its business and business opportunities and seeks monetary damages, interest and costs from him.

NOTE 10   -  LEASE COMMITMENT:
 
MIS leases its office premises in Seefeld, Germany from a company owned by the former CSTO under a three-year agreement commencing August 1, 2012 at a monthly rate of approximately $3,000, plus 19% V.A.T. The Company is liable for maintenance, insurance and taxes. The lease may be extended for one year. Rent expense for the three months ended March 31, 2013 was approximately $9,400.
 
The Company occupies its New York Offices, without cost, from the law firm of which the Secretary and Treasurer is a partner. The Company estimates the value to be immaterial.
 
NOTE 11  -  INCOME TAXES:
 
At March 31, 2013, the Company had available approximately $5,340,000 of net operating loss carry-forwards for U.S. income tax purposes which expire through 2032. In addition, MIS has German net operating loss carry forwards of approximately $4,452,000, with no expiration date.
 
The Company’s deferred tax assets at March 31, 2013 and 2012, based on net operating loss carry forwards, are approximately $3,330,000 and $55,000, respectively, with a valuation allowance in the same amount.
 
 
10
 
 
NOTE 11  -  INCOME TAXES (CONTINUED):
 
Actual income tax/(benefit) differs from the expected tax /(benefit) computed by applying the U.S federal corporate rate of 34% to income/(loss) before income taxes as follows:
 
   
For the quarters ended
  
   
March 31,
  
   
2013
    
2012
  
             
Computed expected tax benefit
  
$
(846,000
)
  
$
(5,000
)
Change in valuation allowance
    
846,000
      
5,000
  
             
   
$
-0-
    
$
-0-
  
 
Due to the uncertainty of their realization, no income tax benefit has been recorded by the Company for these net operating loss carry forwards as valuation allowances have been established for any such benefits.  The increase in the valuation allowance was the result of increases in the net operating losses discussed above.  Therefore, the Company’s provision for income taxes is $0 for the quarters ended March 31, 2013 and 2012.
 
At March 31, 2013 and 2012, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required.  The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months.  The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense.  At March 31, 2013 and 2012, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions.
 
The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations.  The Company currently has no federal or state tax examinations in progress nor has it had any federal or state examinations since its inception. The 2009 through 2012 tax years generally remain subject to examination by federal and state tax authorities.
 
 
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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statement Notice
 
Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) in regard to the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of AVRA Surgical Robotics, Inc. (“we”, “us”, “our” or the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.
 
Overview

We are a development stage company and have not earned any revenues from operations to date. It is unlikely that we will have any revenues unless and until our products are ready for commercial manufacturing and have received regulatory approval in the markets where they will be sold. Since inception, the Company has relied primarily on sales of our securities to fund our operations. The Company has never been profitable and cannot be assured that we will be profitable in the future. From inception through March 31, 2013, our loss from operations totaled $9,790,221 and our net loss for the three months ended March 31, 2013 totaled $2,487,934.

Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential by devoting our efforts to designing, developing and manufacturing surgical robotic systems.  In order to attain this goal, we, through our 80% owned subsidiary, MIS, entered into the Development Agreement with RGM, an engineering company. On April 8, 2013, the Company, through MIS, notified RGM of its intention to terminate the Development Agreement with immediate effect, subject to certain legal formalities. On the same date, RGM provided the Company, through MIS, a notice of immediate termination of the Development Agreement for cause. The Company intends to continue the product development using another engineering company unless the dispute is resolved.
  
The Company expects to continue to require substantial funds for research and development, to continue to develop our MIS system. The Company plans to meet our operating cash flow requirements by raising additional funds from the sale of our securities and, whenever possible, by entering into development partnerships to assist us with our technology development activities. We may also consider selling certain assets or entering into a transaction such as a merger with a business complimentary to ours.
 
During the three months ended March 31, 2013, the Company has raised an aggregate of $1,725,400 in connection with the closing of private placement offerings of the Company’s common stock and warrants. While we have been successful in raising funds to fund our operations since inception and we believe that we will be successful in obtaining the necessary financing to fund our operations going forward, we do not have any committed sources of funding and there are no assurances that we will be able to secure additional funding. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, if the efforts noted above are not successful, it would raise substantial doubt about the Company’s ability to continue as a going concern. If we cannot obtain financing, then we may be forced to further curtail our operations or consider other strategic alternatives. Even if we are successful in raising the additional financing, there is no assurance regarding the terms of any additional investment and any such investment or other strategic alternative would likely substantially dilute our current stockholders.
 
 
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Emerging Growth Company
 
We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. In addition, Section 107 of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards.

Liquidity and Capital Resources
 
As of March 31, 2013, the Company had $540,850 in cash and a stockholders’ deficiency of $3,046,437. This compares with $0 cash and a stockholders’ deficiency of $24,240 as of March 31, 2012. The Company had liabilities that totaled $4,232,069 as of March 31, 2013, comprised of $2,564,982 in accounts payable and accrued expenses and $1,667,087 in a loan payable to affiliates and stockholders. This compares to the Company’s total liabilities of $24,240 as of March 31, 2012, comprised of accounts payable and accrued expenses and a loan payable to a stockholder. The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.
 
The Company raised $1,725,400 in equity capital during the three months ended March 31, 2013 through a series of private placements. The Company is dependent on its ability to continue to raise equity capital. On February 12, 2013, the Company filed a Registration Statement on Form S-1 (the “Registration Statement”) with the SEC to register shares in order to raise up to $17,000,000 (net of $15,150,000 after expenses). There is no guarantee that the proposed sale of shares under the Registration Statement will be successful and if not successful, the Company will need to seek other avenues for the necessary capital to continue its development program.
 
The following is a summary of the Company’s cash flows provided by (used in) operating, investing, and financing activities for the three months ended March 31, 2013 and 2012 and for the period from August 29, 2006 (Inception) through March 31, 2013:
 
   
Three Months Ended
March 31,
2013
    
Three Months Ended
March 31,
2012
    
For the Cumulative
Period from
August 29, 2006
(Inception) to
March 31,
2013
  
                   
Net Cash (Used in) Operating Activities
  
$
(1,666,105
)
  
$
(10,932
)
  
$
(4,236,810
)
Net Cash (Used in) Investing Activities
  
$
(79,119
)
    
-
    
$
(431,323
)
Net Cash Provided by Financing Activities
  
$
1869,969
    
$
10,932
    
$
5,259,797
  
Effect of Exchange Rate Changes on Cash
  
$
(9,540
)
    
-
    
$
(50,814
)
Net Increase (Decrease) in Cash
  
$
134,285
      
-
    
$
540,850
  
 
The increase since the three months ended March 31, 2012 in cash available is a result of an increase in sales of the Company’s securities in order to fund the Company’s operations. The increase in accounts payable and accrued expenses in the three months ended March 31, 2013 is a result of the Company changing its business purpose and beginning operations.

The Company has nominal assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations. In addition, the Company is dependent upon obtaining additional funding and capital resources through equity financings and from certain related parties. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations. 
 
 
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Results of Operations

Three months ended March 31, 2013 as compared to the three months ended March 31, 2012

We have not conducted any active operations since inception except hiring our initial employees, entering into the Development Agreement and commencing its implementation through our 80% owned subsidiary MIS including building prototypes and manufacturing key components. We have generated no revenue since inception on August 29, 2006. It is unlikely we will generate any revenue until our products are developed and have been approved for sale. The Company’s plan of operation for the next twelve months shall be to continue its efforts to design, develop and manufacture surgical robotic systems.
 
For the three months ended March 31, 2013, we had a net loss of $2,487,934 consisting of research and development expenses of $1,428,119, incurred primarily through the Development Agreement and general and administrative expenses consisting of compensation, of which $185,615 is stock based, legal expenses for the formation of the Company and for the work on the Registration Statement, along with various other travel and occupancy items.
 
For the three months ended March 31, 2012, we had a net loss of $13,932, consisting of legal, accounting, audit, and other professional service fees incurred in relation to the preparation and filing of our periodic reports and general, administrative, and interest expenses.
 
For the cumulative period from August 29, 2006 (Inception) to March 31, 2013, we had a net loss of $9,790,221 comprised of legal, accounting, audit, and other professional service fees incurred in relation to the formation of the Company, the filing of our Registration Statement on Form 10-SB in November 2006 and the Registration Statement, the preparation and filing of our periodic reports, and general, administrative, and interest expenses.
 
Critical Accounting Policies

For a summary of our critical accounting policies, please see Note 3 to our financial statements, which are included in this report.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, please see Note 3 to our financial statements, which are included in this report.

Off-Balance Sheet Arrangements

As of May 15, 2013, we did not have any off-balance sheet arrangements.
 
 
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Trends, Events and Uncertainties

The following trends, events and uncertainties may have a material impact on our potential sales, revenue and income from operations:

 
1)
completion of our surgical robotic products ready for manufacturing;
 
2)
regulatory approval of our products in the markets where we desire to sell them;
 
3)
market acceptance of our products by surgeons and patients in the markets where we desire to sell them;
 
4)
our ability to efficiently manufacture, market and distribute our products;
 
5)
our ability to sell our products at competitive prices which are profitable;
 
6)
the willingness of surgeons to learn to use our products; and
 
7)
the willingness of insurers and national health plans to reimburse patients for robotic surgeries at prices which are profitable.
 
To the extent we are unable to succeed in accomplishing (1) through (7), our sales could be lower than expected and our ability to generate income from operations impaired.

Contractual Obligations

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer, Principal Financial Officer and Secretary, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report.  Based on that evaluation, the Company’s management including the Chief Executive Officer, Principal Financial Officer and Secretary, concluded that the Company’s disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms.

Evaluation of Internal Controls and Procedures

Our management is also responsible for establishing and maintaining adequate internal control over financial reporting.  The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

 
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Our internal control over financial reporting includes those policies and procedures that:

●
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
●
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of the Company’s management and sole director; and

●
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2013.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control over Financial Reporting – Guidance for Smaller Public Companies.  Based on our assessment of those criteria, management believes that the Company maintained effective internal control over financial reporting as of March 31, 2013.

This quarterly report does not include an attestation report of our registered public accounting firm regarding our internal controls over financial reporting.  Management’s report was not subject to attestation by our registered public accounting firm pursuant to Section 404(c) of the Sarbanes-Oxley Act that permits us to provide only management’s report in this annual report.

Changes in Internal Controls over Financial Reporting

There have been no significant changes to the Company’s internal controls over financial reporting that occurred during our last fiscal quarter of the year ended March 31, 2013, that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.

 
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PART II — OTHER INFORMATION

Item 1.  Legal Proceedings.

On April 19, 2013, the Company served a complaint in a case filed in New York state court against Mr. Bernd Gombert, its former CSTO and Executive Vice President.  The complaint alleges that Mr. Gombert breached his duty of loyalty to the Company by attempting to misappropriate its business and business opportunities and seeks monetary damages, interest and costs.

Item 1A.  Risk Factors.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

On January 31, 2013, the Company issued and sold an aggregate of 350,000 shares of common stock and issued (1) warrants for 100,000 shares of common stock with an exercise price of $5.00 per share and expiring on December 31, 2016 (the “2016 Warrant”) and (2) warrants to purchase 400,000 shares of common stock with an exercise price of $5.00 per share and expiring on December 31, 2015 (the “2015 Warrants”) to three accredited investors, including Dr. Sudhir Srivastava, our former President, at a per share price equal to $0.0001 for aggregate gross proceeds of $35.00 pursuant to the terms and conditions of those certain  securities purchase agreements, dated January 31, 2013 (the “January Purchase Agreements”).

On February 20, 2013, the Company issued and sold an aggregate of 633,597 shares of common stock to eleven accredited investors at a price per share equal to $1.50 for aggregate gross proceeds of $950,400 pursuant to the terms and conditions of those certain Securities Purchase Agreements, dated February 20, 2013 (the “February Purchase Agreements”).

On March 12, 2013, the Company issued and sold an aggregate of 117,371 shares of common stock to an accredited investor at a price per share equal to $2.13 for aggregate gross proceeds of $250,000 pursuant to the terms and conditions of that certain Securities Purchase Agreement, dated March 12, 2013 (the “March Purchase Agreement”).

On March 25, 2013, the Company issued and sold (i) an additional 590,500 shares of common stock to three accredited investors at a price per share equal to $0.0001 and a warrant to purchase 400,000 shares of common stock, exercisable at an exercise price of $5.00 per share and expiring on December 31, 2015, substantially in the form of the 2015 Warrants, to one of the investors pursuant to certain Securities Purchase Agreements dated as of March 25, 2013 (the “Subsequent Initial Offering Purchase Agreements”) for aggregate gross proceeds of approximately $59.05; (ii) an additional 16,666 to an accredited investor at a price per share equal to $1.50 pursuant to a certain Securities Purchase Agreement substantially in the form of the February Purchase Agreement for aggregate gross proceeds of approximately $25,000; and (iii) an additional 234,742 shares of common stock to an accredited investor at a price per share equal $2.13 pursuant to a certain Securities Purchase Agreement substantially in the form of the March Purchase Agreement for aggregate gross proceeds of approximately $500,000.

            No brokers or finders were used and no commissions or other fees have been paid by the Company in connection with the sale of securities described above. The sales of the securities identified above were made pursuant to privately negotiated transactions that did not involve a public offering of securities and, accordingly, were exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof and the rules promulgated thereunder. Each of the above-referenced investors represented to us, as applicable, in connection with their investment that they were “accredited investors” (as defined by Rule 501 under the Securities Act) and were acquiring the shares for investment and not for distribution, that they could bear the risks of the investment and could hold the securities for an indefinite period of time. The investors received written disclosures that the securities had not been registered under the Securities Act and that any resale must be made pursuant to a registration or an available exemption from such registration. The sales of the foregoing securities were made without any form of general solicitation or advertising and all of the foregoing securities are deemed restricted securities for purposes of the Securities Act.
 
 
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The terms of the 2016 Warrant, the 2015 Warrant, the January Purchase Agreement, the February Purchase Agreement, the March Purchase Agreement and the Subsequent Initial Offering Purchase Agreement described herein are intended to be a summary only and are qualified in their entirety by the terms and conditions of the 2016 Warrant, the 2015 Warrant, the January Purchase Agreement, the February Purchase Agreement, the March Purchase Agreement and the Subsequent Initial Offering Purchase Agreement filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6, respectively, to this quarterly report on Form 10-Q.

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Mine Safety Disclosures.

Not applicable.

Item 5.  Other Information.

On March 1, 2013, the CSTO terminated his employment agreement with the Company and resigned as an officer.

On March 12, 2013, Dr. Sudhir Srivastava resigned from the office of President of the Company.

Item 6.  Exhibits.

(a)  Exhibits required by Item 601 of Regulation S-K.

Exhibit No.
  
Description
  
Incorporation by Reference
       
Form
  
Exhibit
  
Filing Date
                 
3.1
  
Certificate of Ownership and Merger filed with the Office of Secretary of State of Delaware on August 3, 2012
  
8-K
  
3.1
  
08/07/2011
                 
3.2
  
Certificate of Incorporation
  
10-SB
      
11/22/2006
                 
3.3
  
Bylaws
  
10-SB
      
11/22/2006
                 
10.1
  
Form of 2016 Warrant, dated January 31, 2013*
            
                 
10.2
  
Form of 2015 Warrant, dated January 31, 2013
  
8-K
  
10.2
  
01/07/2013
                 
10.3
  
Form of January Purchase Agreement, dated January 31, 2013
  
8-K
  
10.1
  
01/07/2013
                 
10.4
  
Form of February Purchase Agreement, dated February 20, 2013
  
10-K
  
10.10
  
04/01/2013
                 
10.5
  
Form of March Purchase Agreement, dated March 12, 2013*
            
                 
10.6
  
Form of Subsequent Initial Purchase Agreement, dated March 25, 2013
  
8-K
  
10.3
  
01/07/2013
                 
31.1
  
Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012
     
31.2
  
Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012
     
32.1
  
Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
     
32.1
  
Certification of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
     
101.INS
  
XBRL INSTANCE DOCUMENT
     
101.SCH
  
XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
     
101.CAL
  
XBRL TAXONOMY CALCULATION LINKBASE DOCUMENT
     
101.DEF
  
XBRL TAXONOMY DEFINITION LINKBASE DOCUMENT
     
101.LAB
  
XBRL TAXONOMY LABEL LINKBASE DOCUMENT
     
101.PRE
  
XBRL TAXONOMY PRESENTATION LINKBASE DOCUMENT

* Filed herewith.
 
 
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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.

 
AVRA SURGICAL ROBOTICS, INC.
  
       
Dated: May 15, 2013
By:
/s/ Barry F. Cohen  
    Barry F. Cohen  
    Chief Executive Officer, President
and Director
Principal Executive Officer
  
       
Dated: May 15, 2013 By: /s/ A. Christian Schauer  
   
A. Christian Schauer
Chief Financial Officer
Principal Financial Officer
  
 

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