Business Context and Reporting Period
This Form 8-K was filed by Intellisense Solutions, Inc. (Nevada) on March 21, 2019, reporting a material definitive agreement entered into by its 90%-owned subsidiary, Canna Patch Ltd. The filing details a strategic partnership with Yissum Research Development Company of Hebrew University of Jerusalem Ltd. regarding the development of a cannabis patch.
Key Financial Metrics
The filing does not provide standard financial statements, revenue, profit, cash flow, or debt metrics. The only specific financial figure disclosed relates to the funding of a feasibility study:
- Total Study Funding: $94,500 plus VAT.
- Payment Schedule: $23,625 due on March 21, 2019, and $23,625 due three months later for the first stage. An additional $23,625 is due at the commencement of stage two and three months thereafter, contingent on the exercise of the option.
Material Changes
The primary material change is the execution of a Research and Option Agreement effective March 21, 2019. This agreement establishes a two-stage, 12-month feasibility study to develop a cannabis patch utilizing exudates-based formulations for systemic and trans-dermal delivery. Upon successful completion of the first stage, Canna Patch holds an option to secure an exclusive, worldwide license to the study's intellectual property.
Outlook, Risks, and Contingencies
Management Commentary and Outlook: The agreement grants Canna Patch the right of first review for any new uses of the patch technology for non-cannabis chemical constituents. If the option is exercised, Canna Patch assumes responsibility for patent filing, maintenance, and prosecution costs.
Risks and Contingencies:
- Termination Rights: Either party may terminate upon insolvency or uncured breach within 60 days. Yissum may terminate with 30 days' notice for unauthorized early termination or failure to fund. Canna Patch may terminate after the first stage within 14 days of receiving the interim report.
- Liability: Canna Patch must indemnify Yissum and Hebrew University for liabilities arising from the use of study results.
- Exclusivity: During the option period, Yissum is prohibited from negotiating with third parties regarding the study results.
Investor Verification Checklist
- Verify the current cash position of Intellisense Solutions, Inc. to confirm ability to fund the $94,500 study plus VAT.
- Review the full text of the Research and Option Agreement (Exhibit 10.10) for specific definitions of "feasibility" and success criteria for the interim report.
- Confirm the ownership structure and operational status of the subsidiary, Canna Patch Ltd.
- Assess the potential future costs associated with patent filings and prosecution if the exclusive license option is exercised.