Item 1.01 Entry into a Material Definitive Agreement.
The Merger Agreement
and the Merger
On November 7, 2022, AVRA entered into a definitive
Merger Agreement (the “Merger Agreement”), by and among AVRA, AVRA-SSI Merger Corporation, a Delaware corporation and
wholly-owned subsidiary of AVRA (“Merger Sub”), CardioVentures, Inc., a Delaware corporation (“SSI - DE”)
Dr. Sudhir Srivastava (“Dr. Srivastava”), who, through his holding company, owns a controlling interest in SSI-DE.
SSI-DE, through a subsidiary, owns a controlling
interest in Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company (“SSI - India”). Based in Haryana,
India, SSI-India is engaged in the development, commercialization, manufacturing and sale of medical and surgical robotic systems utilizing
patents, trademarks and other intellectual property held by Dr. Srivastava (the “SSI Intellectual Property”).
Pursuant to the Merger Agreement, Merger Sub will
merge with and into SSI – DE (the “Merger”). In the Merger, holders of the outstanding shares of common stock
of SSI – DE at closing (including certain parties providing Interim Financing as described below), will receive in exchange for
their SSI – DE shares, such number of shares of AVRA common stock as will result in such holders owning 95% of the outstanding post-Merger
shares of AVRA common stock, with the current shareholders of AVRA owning 5% of the outstanding post-Merger shares of AVRA common stock.
In addition to the foregoing, upon completion
of the Merger, the holders of SSI – DE common stock will receive, pro rata, shares of newly designated Series A Non-Convertible
Preferred Stock (the “Series A Preferred Shares”).
The Series A Preferred Shares will vote together
with Shares of our common stock as a single class on all matters presented to a vote of stockholders, except as required by law and entitle
the holders of the Series A Preferred Shares to exercise 51.0% of the total voting power of the Company. The Series A Preferred Shares
are not convertible into common stock, do not have any dividend rights and have a nominal liquidation preference. The Series A Preferred
Shares also have certain protective provisions, such as requiring the vote of a majority of Series A Preferred Shares to change or amend
their rights, powers, privileges, limitations and restrictions. The Series A Preferred Shares are automatically redeemable by the Company
for nominal consideration at such time as the holder owns less than 50% of the shares of AVRA common stock received in the Merger.
Concurrent with consummation of the Merger, Dr.
Srivastava will assign the SSI Intellectual Property to AVRA or a subsidiary of AVRA. Moreover, the current directors and executive officers
will resign, other than Barry Cohen, who will continue as a director and in a new executive capacity, and the designees of the SSI –
DE stockholders will be appointed to AVRA’s board of directors and management. Post – Merger, AVRA intends to focus a significant
part of its efforts on expanding and further developing the business of SSI-India, which will be an indirect majority-owned subsidiary
of AVRA.
In addition to customary closing conditions, consummation
of the Merger is subject to the following conditions to be satisfied or waived by SSI – DE and Dr. Srivastava at or prior to consummation
of the Merger:
| ● | AVRA shall have changed its corporate name to
“SS Innovations, Inc.;” |
| ● | AVRA
shall have implemented a one for ten reverse stock split; and |
| ● | AVRA
shall have increased its authorized common stock to 250,000,000 shares. |
The Merger Agreement, the Merger and the above
corporate actions have been approved by AVRA’s board of directors and majority stockholders. They are subject to the filing with
and processing of an Issuer Company – Related Action Notification Form with the Financial Industry Regulatory Authority and the
filing of appropriate amendments to our Articles of Incorporation with the Florida Secretary of State.
The above summary of the Merger Agreement and
the Merger is qualified in its entirety by reference to the definitive Merger Agreement, a copy of which is filed as Exhibit 2.1
to this Report and which is incorporated herein by reference.
Interim Financing
Pending negotiation and execution of the Merger
Agreement and consummation of the Merger, we advanced SSI – DE and its affiliates, the amount of $1,440,000 as of the date of this
Report (the “Interim Financing”). The Interim Financing is evidenced by one-year promissory notes made in favor of
the Company by SSI-DE and its affiliates, including Dr. Srivastava, jointly and severally (the “SSI Notes”). Interest
on the SSI Notes accrue at the rate of 7% per annum, payable together with the principal amount at maturity. The SSI Notes have an original
issue discount of 10%. If the SSI Notes are not repaid in full on or at maturity, they will automatically convert into a percentage equity
interest in SSI-DE determined by dividing the principal amount of accrued interest on the SSI Notes divided by $100 million. The SSI Notes
contain customary default provisions and other typical terms and conditions.
Prior to consummation of the Merger, we may make
additional advances to SSI – DE and its affiliates of up to an aggregate principal amount of $5,000,000 of Interim Financing, evidenced
by additional SSI Notes. These SSI Notes will be substantially similar in form and substance to the initial SSI Notes, provided,
however, that SSI Notes issued in excess of an aggregate principal amount of $2,000,000, will have an original issue discount of
6% as opposed to 10%, and the valuation for determining conversion will be $250 million as opposed to $100 million.
In order to fund the Interim Financing, the Company
offered and sold to three accredited investors, $1,000,000, $100,000 and $500,000 in principal amount of one-year convertible promissory
notes (the “Convertible Notes”). The Convertible Notes will have the same interest rate and payment terms as the SSI
Notes and otherwise be substantially similar to the SSI Notes, provided, however, that the Convertible Notes do not have
an original issue discount. Further, upon consummation of the Merger (if and when it is consummated) the Convertible Notes will automatically
convert into a number of shares of AVRA common stock determined by dividing the principal amount of the Convertible Notes by $100 million
and multiplying such number expressed as a percentage by the number of AVRA shares of common stock issued to the stockholders of SSI-DE
upon consummation of the Merger. The Company may offer and sell up to an aggregate principal amount of $5,000,000 in Convertible Notes
in order to fund the Interim Financing
The Convertible Notes were issued in private transactions
pursuant to the exemptions from registration under Section 4(a)2 of the Securities Act of 1933, as amended and the rules and regulations
promulgated thereunder.
Pending the Merger, each of AVRA and SSI–DE
and its affiliates may seek to secure additional equity or debt financing, including, without limitation, further Interim Financing.