Filing summary
Entity and period: The supplied filing is Intellisense Solutions Inc.’s Form 10-K for the fiscal year ended March 31, 2019, compared with the year ended March 31, 2018. It is not identified in the filing as an Odysight.Ai Inc. filing or a 2018 fourth-quarter report; verify the issuer and period before relying on this summary.
Business context
Intellisense reported no significant operating business or commercial sales. After discontinuing its original web-portal plan, it said it was seeking a merger or acquisition with an operating business. In January 2019, it formed Canna Patch Ltd. (90% owned) and agreed to fund a staged feasibility study of a cannabis patch with Yissum. The study cost is $94,500 plus VAT; continuation to the second six-month stage is optional, subject to an interim report. Canna Patch may obtain an exclusive worldwide license to the study results and related intellectual property.
Financial results and liquidity
| Metric | FY ended March 31, 2019 | FY ended March 31, 2018 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $91,497 | $23,373 |
| Interest expense | $8,043 | $4,602 |
| Net loss | $99,540 | $27,975 |
| Net loss per share | $0.04 | $0.01 |
| Net cash used in operating activities | $102,831 | $23,507 |
| Cash at year-end | $26,322 | $10,153 |
Professional fees rose to $89,760 from $19,709, attributed mainly to legal and other professional fees, including officer and director fees. General and administrative expense declined to $1,737 from $3,664. The filing reports no revenue, so a meaningful revenue or operating margin is not available.
At March 31, 2019, total current liabilities were $198,167, including $170,000 of notes payable and $28,167 due to a related party. Working capital was negative $171,845 and stockholders’ deficit was $171,845. The $170,000 notes bear 8% interest and were due September 30, 2019. The company stated it lacked sufficient cash for the following 12 months and had no financing arranged. No off-balance-sheet arrangements were reported.
Material changes, outlook and risks
- Net loss increased by $71,565 year over year; operating cash use increased by $79,324.
- Notes payable increased from $51,000 to $170,000. Financing activities provided $119,000 in FY2019, supporting the increase in cash despite operating cash outflow.
- Management planned to seek additional loans or equity financing. It warned that without financing, the business would likely fail. The auditor cited recurring losses and a net capital deficiency and expressed substantial doubt about the company’s ability to continue as a going concern.
- The company had no particular merger target or active acquisition negotiations disclosed. Any future combination could substantially dilute existing shareholders; the filing gives no assurance that a transaction or the Canna Patch study will succeed.
- Management found disclosure controls ineffective and identified material weaknesses: no functioning audit committee, inadequate segregation of duties, and ineffective period-end reporting controls. Remediation depended on additional capital and identifying an operating business.
- The company described its common stock as having no current trading market. It also reported shell-company status, no employees as of July 9, 2019, and no intellectual property apart from the potential rights associated with the Canna Patch study.
Important facts to verify
- Confirm that this Intellisense Solutions Inc. filing is the intended issuer and that the relevant period is FY ended March 31, 2019, rather than Odysight.Ai Inc. or 2018 Q4.
- Verify the status and repayment or extension of the $170,000 notes due September 30, 2019, and the company’s subsequent financing and liquidity.
- Check whether the Yissum feasibility study proceeded, whether Canna Patch elected to fund its second stage, and whether any license option was exercised.
- Review subsequent filings for changes in ownership, share count, business combination plans, and remediation of internal-control weaknesses.